Rightmove data prompts market shock as house prices plummet

Latest figures from Rightmove show house prices suffered their largest monthly dip in four years with one London estate agent warning that the wheels of the property market may be starting to come off.

The average asking price of newly listed property has dropped by 2.1% (-£7,862) to £359,137.

Economic headwinds including rapidly rising mortgage costs mean that some would-be buyers have paused their plans for the foreseeable future.

Marc von Grundherr, director of Benham and Reeves, says: “The wheels may seem to be coming off the UK property market with this, the biggest fall in home asking prices that we’ve seen in quite a while.”

But von Grundherr also points out that the Rightmove index is one that reflects sellers’ asking prices.

He says: “This is a reaction to the prospect of a property market decline rather than a decline in itself, albeit we are in danger of that becoming a self-fulfilling prophecy if we are not careful.”

Rightmove forecasts that prices will drop by an overall average of 2% next year.

But Tim Bannister (pictured) Rightmove’s director of property science, says the latest figures are an understandable short-term reaction to recent economic turmoil.

And he adds: “Despite this we end the year with average asking price growth of 5.6%, which is only slightly lower than the 6.3% last year.

“Our data suggests that there are many ready-to-go movers out there waiting for what they feel to be the right time to enter the market in 2023.”

SILVER LINING

James Forrester, managing director of Barrows and Forrester, says: “The silver lining in the cloud here is that sellers are responding to signals that buyers are demanding lower prices and are prepared to sit things out whilst the market adjusts to recent economic woes.

“The fact that those that are selling have re-thought their asking prices in line with buyers’ lower expectations is at least a good thing for estate agents in that this means the gap between buyers’ and sellers’ pricing is now narrower and deals will still be struck accordingly.”

The death knell for the property market.”

But Chris Hodgkinson, managing Director of House Buyer Bureau, was less upbeat.

“Is this the death knell for the property market? Consecutive analysis from a number of house price indexes are now pointing in the same rather negative direction and the picture is bleak.

“On an annualised basis we could be looking at drops in value of double figures by the spring and, whilst this will be blood-curdling for homeowners it should sound the starting-gun for all those first-time buyers that have sat in the wings.”

OPPORTUNITIES

Meanwhile Iain Crawford, chief executive of Alliance, the Real Estate Fund, reckons opportunities beckon.

“Those that understand markets know that cyclicality always prevails,” he says.

“Any asset goes in both upward and downward directions and the current dynamic is surely an adjustment, yet over the long term we all know that property is a safe investment. Some of us will see the current market decline as an opportunity rather than a problem.”