Average asking prices for newly-listed homes rose by 0.7% in September, according to Rightmove, the first monthly price increase since May.
September’s price increase is larger than the ten-year September average of 0.5%, which may be an early sign of the typical autumn increase in activity after a particularly quiet summer this year. The average asking price now stands at £367,440, up £2,441 on the previous month.
Rightmove says that, despite the increase, there is a lot of ground to make up after a succession of monthly price decreases. Prices remain 0.8% lower than this time last year, and 2.3% below where they were at the start of the summer.
The property portal’s report says that it remains a challenging market for sellers, with the number of homes available on the market for sale at a 12-year high for the time of year and affordability still stretched for buyers, while demand from buyers remains 9% lower than this time last year.
The Rightmove report highlights the importance of accurate pricing, with 74% of homes that have sold so far this year priced right first time without the need for a subsequent price reduction.
Regional forces also come into play alongside price, with Rightmove data showing that 91% of homes in Scotland are currently finding a buyer, while the North West stands at 71%.
This is in contrast to the South East, where only 56% of homes are finding a buyer, and just 42% in London, where affordability is most stretched and there is a larger mismatch between supply and demand.
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.
“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.”
Ryan Etchells, Chief Commercial Officer at Together, commented: “In defiance of the recent gloom which has beset the property market, a monthly growth in house prices shows us that the market may be more resilient than previously thought. But despite some encouraging signs in the data, the increase may well be the final ray of light before a difficult winter for the market.”
“Although the Bank of England kept interest rates at 3.75% last week, the chance of multiple rate hikes in the next few months remains high. If this proves to be the case, we need to prepare for falls in house prices in the near term. And there are other factors which bear paying attention to.”
“Firstly, the brief reprieve offered to the market by the interest rate hold may provide an opportunity for buyers to move forward with their plans before mortgage rates become less favourable down the line. The other consideration is the Budget, where property tax reforms could either seriously impede the market or aid it. The government needs to be careful to strike the right balance and not pile further pressure on mortgage borrowers.”
“Those pressing ahead with property plans despite the current market dip should consider working with a specialist lender who can assess their needs on an individual basis and offer more flexible finance based on a case-by-case approach.”
