Average new seller asking prices in London have dropped 2.1 per cent, in line with the annual August dip.
The average asking price for a house coming to market in the capital July was £677,794, according to the latest Rightmove house price index. That’s £17,285 knocked off the advertised house price since June.
London asking prices are up 0.7 per cent annually. But data for individual boroughs varies widely, with one borough recording a 4.8 per cent annual drop in asking prices, while another recorded a 5.4 per cent annual increase.
A recent rates cut from the Bank of England has seen a flurry of sub four per cent mortgages coming back from lenders, prompting an immediate boost in buyer interest said Rightmove.
“The fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.”
Currently the best five-year fixed rate mortgage offer on the market is 3.83 per cent — although you would need a 40 per cent deposit. It’s the lowest rate available to buyers since the disastrous mini-budget in September 2022 left mortgaged Londoners with thousands added to their annual bill.
“The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity,” said Tim Bannister, Rightmove’s director of property science. “While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment. As the summer holiday season comes to an end, the conditions are there for a more active autumn market.”
As a result, he added, Rightmove has revised its annual UK house price prediction up from a one per cent drop to a one per cent rise by the end of 2024.
The most dramatic annual shifts in asking price are currently between two neighbouring boroughs. In Brent, where the average asking price is now £616,308, asking prices have dropped by 4.8 per cent annually. In Westminster on the other hand, asking prices are up 5.4 per cent, with average asking prices currently at £1,537,470.
House prices are also up 3.9 per cent in Lewisham (£532,374), 3.7 per cent in Camden (£1,069,501) and 3.1 per cent in Wandsworth (£876,171).
Kingston on Thames saw an above average drop in asking prices of 2.9 per cent, with average asking prices down to £689,962.
Barking and Dagenham (0.5 per cent) the least expensive borough, with an average asking price of £375,156, while Kensington and Chelsea (-0.9 per cent) is still the most expensive with an average asking price of £1,673,995.
Rightmove reported that buyer interest is up 19 per cent since August 1st compared to the same time a year ago, a trend identified by estate agents.
“Despite the summer holidays, we are currently seeing more house hunters starting or resuming their search than we did in August of last year,” said Matt Thompson, head of sales at Chestertons. “This increase in buyer activity is predominantly driven by lower interest rates and the availability of more attractive mortgage products which is even tempting first-time buyers to take the first step towards home ownership.”
“There is no doubt the cut in base rate has been a shot in the arm for the housing market.”
Jeremy Leaf, a north London estate agent, said that the traditionally quiet summer period was busier than usual due to new mortgage deals.
“There is no doubt the cut in base rate has been a shot in the arm for the housing market, particularly in terms of new enquiries during the traditionally quiet summer period,” Leaf explained.
"However, the change was anticipated for such a long time so helped soften mortgage pricing on the high street. This meant the impact on property values has been modest to date.”
“There has been an uptick in the number of buyers and sellers registering interest, keen to take advantage of lower mortgage rates.”
Tomer Aboody, director of specialist lender MT Finance said: “Now that we’ve had the first interest rate cut in a few years, mortgages have followed suit, which has already led to more activity in the market. There has been an uptick in the number of buyers and sellers registering interest, keen to take advantage of lower mortgage rates. This, along with lower inflation numbers, has provided a positive outlook and feel-good factor for the market, bolstered by the hope of further rate reductions to come.”
However, the Autumn Budget from new chancellor Rachel Reeves could put a dampener on the housing market, Aboody cautioned. “[There’s] a fear that higher taxes could result in that feel-good factor slipping away. Here's hoping that isn’t the case and that there is some more positivity in the market for the final four months of the year."
