The average asking price for homes in the UK fell by 2.0% in August, marking the largest monthly decline for this period since 2018. According to property website Rightmove, the average price now stands at £364,999, a decrease of £7,360 month-on-month. This drop is significantly larger than the 10-year average decline of 1.3%. Year-on-year, house prices are down 1.0%, representing the steepest annual decline since December 2023.
Key Details
The decline in house prices is attributed to a combination of seasonal trends and increased market pressures. Rightmove noted that the number of homes available for sale has reached a 12-year high for August, leading sellers to adjust their pricing expectations. In London, prices fell by 3.1% year-on-year, while the North West of England saw a 1.9% increase in average asking prices. Colleen Babcock, a property expert at Rightmove, stated that the larger-than-usual price drop indicates that sellers are recognizing the realities of the market and adjusting their prices competitively.
Background
Concerns over potential tax rises in the upcoming Budget and the impact of higher mortgage rates have further dampened the market. Rightmove has revised its forecast for national house price growth to a range between flat growth and a 2% decline for the year. Babcock highlighted that London buyers are facing significant affordability challenges, exacerbated by high stamp duty fees and a price-to-income ratio that is about 17 times the national average wage.
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The decline in house prices is likely to affect mortgage lending and consumer confidence, particularly in the housing sector. Investors may see increased volatility in real estate investment trusts (REITs) and related financial instruments as market conditions evolve.
Watch for the upcoming Budget announcement in October, which could further influence market sentiment and housing policies.
Based on reporting by: independent.co.uk, cityam.com