Property prices slump to biggest fall in 14 years
Rightmove's Matt Smith says prices dropped 0.6% this month with a historically high number of properties on the market.
Property prices have slumped to the biggest fall in 14 years this month, the latest Rightmove data reveals.
The average price dropped 0.6% – down £2,113 – this month to £376,191, leaving prices 0.5% below a year ago.
Rightmove says the number of homes for sale remains at historically high levels for this time of year, driving price falls.
May’s unusually hot weather kick-started summer earlier than usual, while the World Cup may prove to be a distraction for home-movers, the portal warns.
Good news
Matt Smith, Head of Mortgages at Rightmove (pictured), says there is some good news: “It’s encouraging to see mortgage rates edging down slightly, and even relatively small reductions can make a difference to buyers’ budgets.
“While rates remain higher than the lows of recent years, they have been relatively stable over a sustained period, which is helping to provide more certainty for those planning a move.”
Bounce back
Last week, Rightmove reported that buyer demand bounced back after a lull created by the heatwave during the half-term holiday.
Enquiries dropped 8% in one week at the end of May as the temperatures soared, but surged again, it said.
It went on to add that the number of potential buyer queries is still lower than last year, but remains stable in line with the trends so far this year.
Meanwhile, ongoing economic challenges and global uncertainty remain, Rightmove says.
The number of newly-listed homes coming to market is down 5% compared with this time last year, but is 6% up on 2024 and 12% higher than 2023.
Industry reaction
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “In our offices, sellers wanting to attract genuine buyers have been obliged to accept a larger dose of realism when it comes to asking prices, which are increasingly recognised as an aspirational starting point only.
“The amount of available stock – particularly flats – as well as concerns about the cost of living and mortgage rates, are making first-time buyers nervous about making financial commitments so the market is becoming even more price sensitive.”
“Most sales are holding up but that lingering uncertainty about economic prospects is prompting lengthier transactions, which in turn increases the risk of further re-negotiation or even collapse.”
Marc von Grundherr, Director at Benham and Reeves, says: “Buyers aren’t moving at the pace we’ve seen in previous years, largely because current market conditions and an oversupply of stock are affording them the luxury of both time and choice.
“A larger than usual dip in asking prices also suggests that sellers are finally accepting this reality and pricing to sell, rather than pricing according to their own expectations.”
Henry Crane, Partner at James Laurence Estate Agents, says: “From our perspective across the Midlands, we’re seeing a clear split in the market. Leasehold properties, particularly those with service charge increases or lease issues, are seeing softer demand and less urgency from buyers.
“In contrast, the freehold market is moving at a quicker pace. Well-presented, sensibly priced freehold homes are attracting strong interest and continue to sell quickly and competitively, effectively operating within their own micro-climate.”
Polly Ogden Duffy, MD at John D Wood & Co, says: “The Spring market is split in two. Well-priced family homes, particularly in sought-after school catchments, continue to attract strong interest and can still achieve multiple bids.
“In contrast, the flat market is firmly in buyers’ favour, with high supply giving purchasers greater choice and negotiating power. Asking prices are adjusting, and homes that aren’t priced correctly risk sitting without interest.”
Matthew Harvey, Partner at Tayler & Fletcher, says: “The Cotswolds market remains resilient. Demand is strong from early retirees downsizing into central locations, as well as families drawn by schooling, across both the £300,000 to £400,000 and £500,000 to £1million segments.
“As we move into early summer, transactions are picking up, supported by improved confidence around borrowing rates. The lower middle market is absorbing increased supply, driven in part by landlords exiting, with well-priced homes attracting family buyers looking for more space.”
