The average price of property coming to the market for sale has risen just 0.3% in the past month, much lower than would be expected at this time of year.
The data comes from Rightmove: This is a much lower monthly increase in new seller asking prices than is typical at this time of year, with the long-term average October rise being 1.3%. This much more muted than usual Autumn price bounce comes as buyer choice increases to a level not seen for 10 years, putting downwards pressure on price growth.
The portal continues that this month’s limited price growth is also in partly down to some sellers pricing attractively to find a buyer, particularly with seller competition rising.
- On market house prices have only risen by 0.3% in October
- Buyers have more control in the current market as there are more properties available
- Mortgage rates are still a major factor in sales and affordability and how many buyers are on the market
- Many buyers and sellers are waiting on the Autumn budget before deciding on how to move forward
- As a whole 2024 has seen an increase in sales agreed over 2023 and 2022.
With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched.
Some sellers appear to be acting on this caution, contributing to limited price growth and better buyer affordability. This is helping to keep the number of sales being agreed consistently and strongly ahead of the quieter market of this time last year.
We’re not seeing activity slow down, but some estate agents report that some movers are now waiting for Budget clarity and anticipated cheaper mortgage rates later this year. However, others state that movers are largely just getting on with plans.
The latest snapshot of sales activity shows that the number of sales being agreed is now 29% ahead of the same period last year. There is also what Rightmove calls :a healthy level of underlying buyer demand as people continue to plan their next move.” The number of people contacting agents about homes for sale is up by 17% compared with this time last year.
However, despite this strong housing market activity, the number of new properties coming to the market, and the time they are taking to sell are both increasing, resulting in an increase in available homes for sale.
The number of available homes for sale is 12% higher than at this time last year, but also the average number of homes for sale per estate agent branch is at its highest since 2014.
Competition for buyers is particularly intense at the top-end of the market, where the number of four-bedroom detached houses and five-bedroom-plus homes available for sale is 17% ahead of last year. It’s a buyer’s market, reinforcing the need for sellers to price competitively while affordability is stretched and choice is high.
These affordability pressures, there are positive signs for 2025. The financial markets are still predicting two Bank Rate cuts before the end of the year. If these go ahead, it is expected that further mortgage rate cuts should follow. While mortgage rates are not expected to return to the ultra-low levels of recent years, further drops when combined with wage rises and muted house price growth would be a big step forward for home-buyer affordability.
Despite a Budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025. Market activity remains strong, despite affordability pressures on movers. Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the Summer.
Affordability is still the biggest barrier facing many movers, with mortgage rates still high, so if the expected two cuts come to fruition it could be the boost that many buyers-in-waiting need. 2025 could see the return of the previously priced out buyer.
