Average price tag on a home dips for the first time this year

The average price tag on a home coming on the market has dipped by nearly £5,000 month-on-month, marking the first fall this year so far, according to a property website.

Across Britain, the average asking price fell by 1.3% or £4,795 in cash terms month-on-month in August to reach £365,173, Rightmove said.

However, the fall may be more due to a usual seasonal lull than wider economic factors such as interest rate rises, the website said.

Prices usually fall in August, and the 1.3% drop is in line with the average drop seen that month over the past 10 years, Rightmove said.

This month also marks 20 years since the first Rightmove house price index was first published.

The average asking price for a home has more than doubled since then, standing at £155,994 when the index started.

Tim Bannister, Rightmove’s director of property science, said: “A drop in asking prices is to be expected this month, as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays.”

He added: “Sellers who want or need to move quickly at this time of year tend to price competitively in order to find a suitable buyer fast, with some hoping to complete their move in time to enjoy Christmas in a new home.

“To achieve that this year, they’d need to beat the current average time between accepting an offer and completing the sale of four and-a-half months.

“Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end year at around 7% annual growth, even with the wider economic uncertainty.”

Rightmove said that a combination of rising house prices and interest rates mean that average monthly mortgage payments for new first-time buyers putting down a 10% deposit now exceed £1,000 – at £1,032.

Despite this challenge, demand for properties in the typical first-time buyer sector is 32% higher than at this time in 2019, it said.

Mr Bannister said: “Several indicators point to activity in the market continuing to cool from the lofty heights of the last two years.

“It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year, but right now the data shows that they are not having a significant impact on the number of people wanting to move.

“Demand has eased a degree and there is now more choice for buyers, but the two remain at odds and the size of this imbalance will prevent major price falls this year.

“For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month.”

Rightmove’s report also quoted the views of estate agents.

Jordan Yorath, a partner at Monroe estate agents in Leeds, said: “July was a really strong month for us, and while some might be enjoying a summer break away, we have been busy preparing for the rest of the year, with a great number of listings also ready for September onwards.”

Josephine Ashby, managing partner of John Bray estate agents in Rock, Cornwall, said: “We are still finding that the very top of the market is performing exceptionally well.”