Rightmove has reported that the average price of property coming to market rises by 0.9% (+£3,398) in October to a new record of £371,158, as shortages of property for sale continue to underpin prices.
The firm said a new asking price record may seem surprising given the market uncertainty that followed the government’s mini-budget in late September, but it will take time for any impact to filter through to house prices. There is also little sign of downwards price pressure on existing properties for sale, with the number of reductions up 2% on last month to 23% of all properties reduced, which is still much lower than the pre-pandemic five-year average of 32%.
Rightmove expects asking prices to drop in November and December as they normally do, and says it will be important to distinguish these seasonal price changes from market changes caused by other factors.
Tim Bannister Rightmove’s director of property science, said: “What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget.
“There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues. New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average.
“It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “Concerns about rising mortgage payments and inflation are outweighing savings from cuts in stamp duty and other taxes – particularly for first-time buyers. However, some momentum should be maintained as buyers seek to take advantage of current rates before they rise even higher.
“Listings are up a little and buyer enquiries down so some prices are softening, especially in areas such as London where affordability is more stretched. However, on the whole, prices continue to be supported by record low unemployment, shortage of stock and recent stamp duty reductions.
“Risks are greater now but the market has proved its resilience in the past so we wait to see whether recent political changes can bring some much-needed economic and market stability.”
