The average asking price of newly listed property dipped by 2.1% or £7,862 this December to £359,137, the latest Rightmove figures reveal. In the South-East specifically, house prices have dropped by a significant 2.7%.
This is a bigger dip in new asking prices than is usual at this time of year, as sellers who are determined to find a buyer quickly adjust their expectations and adapt to a less frenzied housing market. At the end of 2022, average asking prices are 5.6% higher than at this time a year ago, only slightly below the 6.3% growth recorded in 2021.
“Though we would always expect prices to drop in December, as motivated sellers try to capture the attention of a buyer before Christmas with a competitive price, this monthly dip is the largest we’ve seen for four years.” comments Rightmove’s Director of Property Science Tim Bannister. “It‘s an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October, before things began to settle down. Despite this we end the year with average asking price growth of 5.6%, which is only slightly lower than the 6.3% last year.”
Rightmove suggests that economic headwinds including rapidly rising mortgage costs mean that some would-be buyers may have paused their plans for the foreseeable future.
However, over the past two weeks, the number of people enquiring about estate agents is up 4% compared to the same period in 2019.
There are also signs that some discretionary buyers who can still move are using the space between now and the New Year to weigh up their options.
Before sending an enquiry, future buyers need to consider what they could purchase, and the number of views of homes for sale on Rightmove is up 11% on last year. This indicates that there are many ready-to-go buyers, monitoring and waiting for a calmer market in 2023, after an uncertain last few months of the year.
“It’s understandable that some buyers are distracted, not only by the festive season, but also by the thought that they may get a better fixed-rate mortgage deal and a more stable outlook by waiting until the new year. We’d usually see a jump in home-mover activity in January, but it takes a while at the start of the year for any significant price changes to feed through, so we’ll be waiting for a potential bounce back in prices in February, which will be a very important leading indicator for the spring moving season.”- Tim Bannister.
The property portal predicts an overall drop of 2% in average asking prices next year as economic headwinds continue to soften activity and lead to a more normal market, though price falls will be tempered by few forced sales.
However, it suggests that affordability constraints will bite in some segments and sectors of the market much more than others, making a national average price prediction for new-to-the-market properties more difficult than usual this year.
Rightmove highlights this will lead to a more pronounced hyper-local market, where one side of a city, town or even street could fare better than another, depending on the types of property available and the desirability and affordability of the exact location.
After many months of having to act extremely quickly, there will be less urgency in the market as buyers wait for the right home to become available for their needs, and some sellers will hold out hoping for a price that matches their expectations.
Rightmove suggests there could be a stand-off in the early months of 2023 between some sellers who are in no rush to drop their prices, and those affordability-strapped or hesitant buyers. This will lead to homes taking longer to sell, and we could see a return to the more normal time to find a buyer of around 60 days.
In this multi-speed market, working with a good, local estate agent who knows every corner of the area will be vital for both buyers and sellers.
Contact our expert team today to find out how to best navigate your property journey as we enter 2023.
