The average asking price of newly listed homes rose by 0.7% in September, the first monthly increase since May, but sellers continue to face a crowded and price-sensitive market, according to Rightmove.
The average asking price increased by £2,441 to £367,440 this month, compared with £364,999 in August.
September’s 0.7% rise was slightly above the 10-year average increase of 0.5% for the month, providing an early indication of the traditional autumn rebound in housing market activity following the summer.
However, asking prices remain 0.8% below their level a year ago and are 2.3% lower than at the start of the summer.
Rightmove said seasonal factors are playing a significant part in the monthly recovery, as buyers and sellers return from summer holidays and resume plans to move. The portal added that several heatwaves and the World Cup had contributed to an unusually subdued summer, leaving scope for a stronger-than-normal rebound in activity.
Despite the rise in asking prices, sellers continue to face difficult conditions. The number of homes available for sale is at a 12-year high for this point in the year, while affordability remains stretched for many prospective buyers.
Colleen Babcock, property expert at Rightmove, said: “September’s above-average price rise is a welcome sign of confidence after a particularly subdued summer, but it should be viewed as a modest recovery rather than a major turning point. Property prices have largely underperformed against the long-term average this year, but September is an exception.
“While buyers and sellers are returning to the market after the summer holidays to potentially fuel an Autumn bounce, sellers face stiff competition from a 12-year high number of other homes for sale. With a large crowd of sellers chasing a smaller number of buyers, realism on pricing or a high-quality finish are absolutely key to attracting a buyer and making a sale.”
BUYER DEMAND REMAINS BELOW LAST YEAR
Rightmove’s real-time data also showed the expected seasonal rise in home-moving activity between August and September, although buyer demand remains 9% below the level recorded at the same point last year.
The number of new properties coming to market is broadly unchanged month on month and 3% lower annually, while the number of sales being agreed is 9% lower than a year ago.
Rightmove said the combination of fewer new listings than last year, historically high levels of available stock and weaker agreed sales pointed to a market in which buyers remain highly sensitive to price.
Across Great Britain, a home currently has an average 61% chance of finding a buyer. That compares with 74% in 2021, when high demand and limited supply drove a much more active market.
The likelihood of securing a buyer varies considerably by region. In Scotland, 91% of homes coming to market are finding a buyer, which Rightmove said partly reflects differences in the buying and selling process.
In the North West of England, 71% of properties find a buyer, compared with 56% in the South East. In London, where affordability pressures are greater and the gap between supply and demand is wider, the proportion falls to 42%.
Rightmove’s analysis also found that 74% of homes sold so far this year had been priced correctly from the outset and had not required a subsequent asking price reduction.
Babcock added: “It’s encouraging to see more buyers returning to the market as we move into Autumn, with activity picking up as usual after a subdued summer. Whilst almost two-thirds of homes are still successfully finding a buyer, the chances of selling vary significantly depending on where you live.
“Over 90% of homes that come to market for sale are selling in Scotland versus less than half in London, meaning those who want to sell will have to set their pricing according to local market conditions. Buyers continue to have plenty of choice and mortgage rates are increasing, so competitive pricing is still the biggest factor in attracting interest and securing a sale.
“Sellers who get the initial asking price right are giving themselves the best chance of standing out in a crowded market”
MOVING TIMES AND MORTGAGE RATES ADD PRESSURE
Sellers entering the market now may also struggle to complete a move before Christmas. Rightmove said it currently takes an average of 64 days for a seller to find a buyer, followed by a further 150 days for a transaction to complete.
That puts the average end-to-end moving process at around seven months, meaning households beginning the process now may not complete until after Easter, although individual transactions can move more quickly.
Affordability has also come under renewed pressure from rising mortgage rates. Rightmove said the average two-year fixed mortgage rate has increased to 5.29%, from 5.09% last month and 4.25% before the war in Iran began at the end of February.
The portal estimates that the average monthly payment on a new mortgage is now around £180 higher than before the conflict began, adding further pressure to buyers’ budgets.
