July delivered the highest number of sales agreed for this month since 2020 as sellers priced sharply to stand out in a crowded market, according to the latest Rightmove data.

Average new seller asking prices fell by 1.3% in August (-£4,969) to £368,740, in line with the 10-year seasonal trend, as summer distractions and high supply levels encouraged competitive pricing.

Over the summer as a whole, average asking prices have dropped by just over £10,000 (-£10,777), giving active buyers more room to negotiate.

While one-third of homes still see price reductions during marketing, competitively priced properties are selling far quicker, on average in 32 days, compared with 99 days for homes that require a later cut.

GET THE PRICE RIGHT

Colleen Babcock, property expert at Rightmove, said: “Astute buyers are now benefitting from average new seller asking prices which are £10,000 cheaper than three months ago.

“The right property at the right price is still finding a buyer, evidenced by July’s strong sales agreed figures. Our data shows it’s better to get the price right in the first place, but if a seller does need to reduce, acting fast is key.”

The number of homes available for sale remains high, some10% above last year, but new listings are only up 4% annually, which Rightmove says could be an early sign of supply beginning to stabilise.

Sales agreed are now running 8% above this time in 2024.

Rightmove’s daily mortgage tracker shows the average 2-year fixed rate at 4.49%, down from 5.17% a year ago, equating to around £117 a month in savings on the average home (based on a 20% deposit, 30-year term).

Babcock added: “We usually see a busier autumn compared with the summer. Sellers aiming to complete before Christmas will need to move quickly to beat the average time to find a buyer and complete a sale.”

MARGINS SQUEEZED

Matt Smith, Rightmove’s mortgages expert, said: “It was positive to see the third Base Rate cut of the year, but the supporting commentary from the Bank of England suggests the opportunity for further cuts has narrowed.

“The markets are currently forecasting one more cut before the end of the year. Lenders have moved their rates downwards to remain competitive, but there doesn’t look like much room for too many further reductions if current market forecasts play out.

“We could potentially see some lenders squeeze their margin to gain a competitive advantage, but I don’t think this would play out across the market and would likely target specific segments of movers.”

BARGAINING POWER

Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “As is customary at this time of year with so many on holiday, the quantity of our enquiries may have dropped but the quality has improved. Serious buyers are taking advantage of the extra choice and their burgeoning bargaining power.

 “On the ground, realistic sellers too are not fixated with achieving the maximum price possible but concentrating on the difference between what they receive and what they have to pay for their next home. As a result, some values are softening but not dropping significantly.

 “Looking forward, those returning holidaymakers may be in for a shock when they see that property which could have been bought at a considerable discount a few months ago is now under offer – and at a better-than-expected price.”

BUYER’S MARKET

Tomer Aboody, director of specialist lender MT Finance, said “As affordability increases, helped by interest rate reductions, buyers are finding themselves in a stronger position.

“A reduction in asking prices indicates that sellers for the most part understand that if they are to attract those buyers they need to be realistic on pricing.

“With buyers paying more stamp duty than earlier in the year, this has impacted budgets but lower interest rates have helped balance this out to some extent.

“Further rate reductions will drive further demand but the close vote at the last Monetary Policy Committee meeting could mean the next cut may be further away than previously hoped.”

UNCERTAIN TERRAIN

Hamza Behzad, Business Development Director, Finova, said:“Today’s data may reflect a slight dip in overall activity, but the market is keeping its footing on uncertain terrain.

“Many lenders were already ‘pricing in’ a cut ahead of the Bank of England’s slashing of the base rate, and this has created a real opportunity.

“Right now, the average two-year mortgage rate has fallen below 4.99% – the first time it has sunk under 5% since September 2022.

“The groundwork is set for a healthy spell of activity.”

“As mortgage availability ramps up and the homeowners close on their remortgage deals, the groundwork is set for a healthy spell of activity in one of the UK’s most resilient investment sectors.

“Nonetheless, we must keep an eye on the bigger picture. Like any market, the UK property sector is influenced by wider geopolitical events, which are by nature hard to predict.

“And affordability is still a major hurdle. It is important that lenders have the right tech to both respond to these global changes at pace and the flexibility to provide innovative products – such as shared joint ownership – to first-time buyers who may otherwise struggle to step onto the ladder. Lenders are innovative by nature, but our sector must keep pushing forward.”