The average price tag on a home coming on the market has dipped for the first time so far this year, according to a property website.
Across Britain, average new seller asking prices recorded a fall of £82 in June, marking the first monthly decrease seen in 2023, Rightmove said.
The fall took the average asking price to £372,812.
Rightmove said it is the first price drop at this time of year since 2017.
On average over the previous 10 years, it has seen an increase of 0.6% in asking prices at this time of year.
Rightmove pointed to mortgage rate rises and stubbornly high inflation piling pressure on to already very stretched budgets.
Tim Bannister, Rightmove’s director of property science, 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.”
Rightmove said that, over the past two weeks, its figures indicate no effect on demand but a modest impact on sales activity as movers navigate the latest mortgage rate rises.
The number of buyers inquiring to agents about properties for sale is 6% higher than the same two weeks in the more normal market of 2019, while the number of sales agreed during this period is 6% lower.
The next Bank of England base rate decision is due on Thursday – and Rightmove said that it remains to be seen whether an expected further increase in rates will impact the website’s figures further.
It is likely to feel very frenetic for those taking out a mortgage right now, as they try to quickly lock in the best rate that they can find— Tim Bannister, Rightmove
Mr Bannister added: “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.
“We expect that there may be more change to come depending on this week’s inflation figures and the Bank of England base rate decision.
“It is likely to feel very frenetic for those taking out a mortgage right now, as they try to quickly lock in the best rate that they can find. Although the impact of higher mortgage rates on activity levels has been limited so far, with prospective buyers who can still afford to move appearing determined to go ahead, it remains to be seen how movers will respond to the expected further rate rises.”
Rightmove’s report also quoted the views of estate agents.
Michelle Gallagher, sales director at JDG in Lancaster, Lancashire, said: “The number of buyers has remained steady despite some of the challenges currently facing the market, though sales activity has dropped slightly.
“Sensibly priced properties are still selling well, but we’re now returning to more normal market conditions where homes are taking longer to sell, and buyers have the time and space to come back for a second viewing.
“We anticipate some more hurdles to overcome in the second half of the year, but it is not all doom and gloom – we’re working with lots of people who are motivated to move and sellers who are pricing right are still seeing a lot of success.”
Andrew Fenton, managing director at Chris Davies Estate Agents in Rhoose in the Vale of Glamorgan, South Wales, said: “Although there has been some recent turbulence, I’d still class what we are seeing in the market at the moment as more normal levels of activity after the pandemic.
“We’re going through a period of transition, and some discretionary sellers in no immediate rush to move are still testing the market with a price as there is a healthy level of buyer activity.
“However, sellers who are motivated to agree a sale soon need be sensible and market their property in line with their local market conditions. While there is now more choice on the market, we still have more buyers than homes for sale, and the stand-out properties are still attracting a queue of people wanting a viewing.”
