New figures show lowest October asking price increase since 2008
The proportion of homes that are finding a buyer has dropped from eight in every 10 to six in every 10 making pricing competitively critical.
Average new seller asking prices increase by just 0.5% (+£1,950) this month to £368,231, the smallest average asking price increase at this time of year since 2008 and well below the historic norm in October of 1.4%, figures from the Rightmove House Price Index reveal today.
The number of sales agreed are 17% below this time last year although Rightmove says buyers are still active for the right property at the right price with the number of buyers enquiring to each available home for sale 8% higher than the more normal market of 2019
PRICING CRITICAL
Meanwhile the proportion of homes that are finding a buyer has dropped from eight in every 10 to six in every 10 making pricing correctly critical.
Tim Bannister, Rightmove’s Director of Property Science, says: “While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market.”
Ben Hudson, Managing Director at York-based Hudson Moody, says: “The market is more price sensitive than it’s ever been, making pricing accurately so crucial. Being too optimistic with the asking price causes a double-whammy for sellers.
“Not only do they inevitably have to reduce the price of their home anyway but they often put off potential buyers with too high an initial asking price and then struggle to recapture this attention when it’s reduced.
“It’s been a bit of a rollercoaster market this year but certainly right now confidence is returning and we’re heading back to more normal, cyclical patterns. If sellers price right, there are buyers out there for them.”
WAIT AND SEE
And Ben Gee, Founder at Berkshire-based Hat and Home, adds: “Some buyers remain cautious and reticent to commit due to easing prices and increased borrowing costs.
“With a significant proportion of instructions seeing at least one reduction prior to sale, many buyers are adopting a ‘wait and see’ approach which is creating inertia across all price ranges.
“Premium stock in excellent condition or in the most sought—after locations continues to get strong interest quickly, but the mass market of homes needs to offer ‘good value’.
“Ambitious asking prices are simply slowing down the speed of sale for sellers as they are being ‘pitched’ to the wrong audience until a price correction is made.”
BUYER CONFIDENCE
Matt Thompson, head of sales at Chestertons, says: “An increasing number of London house hunters resumed their property search after the Bank of England announced that interest rates remain at 5.25%.
“The uplift in buyer confidence continued throughout October as we registered more buyer enquiries and higher volumes of property viewings being conducted.
“Further boosting October’s market activity is the fact that we have now entered the last few months of the year, with many buyers wanting to find a property before the festive season.
“As a result, the market is becoming more competitive again with some properties receiving multiple bids by several buyers.”
