Asking prices for homes across Britain dropped in June for the first time in six years, indicating an earlier-than-usual summer slowdown amid mortgage market turmoil and expectations of further Bank of England interest rates increases, Rightmove’s latest snapshot of the market reveals.
The property portal said the marginal drop in prices of £82 to £372,812 was the first monthly decline in asking prices this year and the first drop seen in the month of June since 2017.
Average asking prices over the previous decade for this time of the year had increased by 0.6% on average, the survey showed. Compared with a year earlier, asking prices were 1.1% higher
Rightmove’s Tim Bannister said: “Average new seller asking prices, the first and leading indicator of new trends in the market, have dropped slightly this month, signalling that the belated spring price bounce has quickly turned into an earlier than usual summer slowdown.
“We expect asking prices to edge down during the second half of the year which is the normal seasonal pattern, and while we sometimes re-forecast our expectations for annual price changes at this time, current trends suggest that our original forecast of a 2% annual drop in asking prices at the end of 2023 is still valid.
“Agents report that new sellers are sitting in two camps – those who still have overoptimistic price expectations following the buoyant pandemic market, and those who have adapted to the new conditions and are coming to market with a competitive price. Sellers who price competitively are much more likely to find a suitable buyer quickly before their home appears stale, and they can often then negotiate on price on any onward purchase.”
This week’s inflation figures and Bank of England interest rates decision could spell more changes for the housing market, according to Bannister.
“We expected some more twists and turns this year and we’ve had several in the last month, including stubbornly high inflation figures, surprisingly large average wage increases, and their eventual impact on mortgage interest rates and availability,” he added.
Property industry reacts to Rightmove House Price Index
