Newly listed asking prices fell this month, according to Rightmove, as sellers attempted to sell amid decade-high competition to secure buyers.
New seller asking prices dropped by 0.3 per cent, the equivalent of £1,277 in June to £378,240.
This is an unusual dip for June, according to the property portal. This month’s price drop compares to an average increase in June of 0.4 per cent over the last ten years.
There are likely a number of factors causing the dip in asking prices.
Rightmove says the fall may be a delayed response to the stamp duty changes at the start of April, which increased costs for many home movers and first-time buyers.
It also says that the number of homes on the market is at a decade-high level, which is also likely putting downwards pressure on prices.
Summertime sadness: New seller asking prices dropped by 0.3 per cent (-£1,277) this month to £378,240
With more sellers coming into the market than new buyers, pricing realistically remains key for a successful sale, according to Colleen Babcock, property expert at Rightmove.
‘It appears that we’re now seeing the decade-high level of homes for sale, and the recent stamp duty increases in England, have a delayed impact on new sellers’ pricing,’ said Babcock.
‘Prices have fallen this month after the new records set in April and May. Agents have been telling us that sellers need to set a competitive price to have a better chance of finding a buyer in the current market, and it looks like many are listening and responding to that message.
‘Such realistic pricing will remain key in the coming months.’
More renters are turning towards buying
However, there is also an increasing number of buyers out house hunting, which may be why we are yet to see any dramatic falls in asking prices. In fact, new listed asking prices are still trending 0.8 per cent above where they were this time last year.
For the first time in at least a decade, both London and Scotland have seen more first-time buyers looking to buy than tenants looking to rent, according to separate data from the estate agent, Hamptons.
Much of this will be to do with average wages are rising faster than house prices, and many lenders loosening their affordability criteria meaning people may find they can borrow more than previously.
For would-be first-time buyers with small deposits, falling mortgage rates have also pushed the monthly cost of purchasing below the cost of renting, according to Hamptons.
It says anyone with a deposit of at least 10 per cent is now likely to find themselves better off buying than renting.
‘Lower mortgage rates are changing the arithmetic for tenants who are thinking about buying,’ said Aneisha Beveridge, head of research at Hamptons.
‘While mortgage rates remain high relative to pre-Covid times, three years of above-inflation rental growth mean that for most, buying remains cheaper than renting.
‘This has boosted first-time buyer numbers and reduced demand in the rental sector.’
Location matters
The higher-priced South West, South East and London regions have seen the largest price drops this month, according to Rightmove.
Buyers in these regions are disproportionately affected by April’s stamp duty changes, and some sellers may be adjusting their prices downwards to account for this.
These three regions have also seen the largest increases in available homes for sale compared to last year, with rising supply levels putting downwards pressure on prices.
Increased stamp duty charges on investment and second homes, as well as higher council tax on second homes in some coastal hotspots like Cornwall and Devon, are likely contributing to the higher number of properties now up for sale.
By contrast, prices have actually risen the most this month in the more affordable North West, Wales, and Yorkshire and The Humber.
These regions are less affected by stamp duty increases, and in the case of Wales, not at all affected.
The number of available homes for sale in these regions is also up less substantially compared last year than in southern England.
An unusual dip for June: New sellers have lowered their price expectations amid decade-high competition to secure buyers, according to Rightmove
Why it matters to price correctly
It can always be tempting for sellers to try their luck at a high price – but Rightmove is warning that this could backfire spectacularly.
Its data shows the impact of coming to market with a competitive price, a well written description, and attractive images that encourage a potential buyer to enquire about a viewing immediately.
Homes that receive an enquiry on the first day of marketing are 22 per cent more likely to successfully find a buyer than homes which take more than two weeks to receive their first enquiry.
‘Serious sellers are more focused than ever, reducing or listing property at much more attractive asking prices,’ said Josephine Ashby, managing partner of John Bray Estates in Rock, Cornwall.
‘Buyers have more choice than ever, so the combination of a rare abundance of high-quality properties at much reduced guide prices in the prime coastal areas, is resulting in the tide finally turning in a positive way.’