The average price of property coming to the market has dropped by over 2% this month, a bigger dip than usual at this time of year as some determined sellers price aggressively to tempt hesitant buyers.
The average asking price of newly listed property dropped this month by £7,862 to £359,137. 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.
Consequently, 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.
Property industry reaction:
Tom Bill, head of UK residential research at Knight Frank, said: “House price declines since the mini-Budget are due to nervous rather than absent buyers. The number of new UK buyers registering in November was 5% up on the five-year average while the number of offers made was 17% down, Knight Frank data that excludes 2020 shows.
“Recent mortgage market volatility has dented activity but there will be more clarity around the longer-term trajectory for house prices from March next year as rates settle down. The spring selling season will see the price expectations of sellers put to the test and, after 13 years of ultra-low rates, could be a ‘wake up and smell the coffee’ moment.”
Marc von Grundherr, director of Benham and Reeves, commented: “The wheels may seem to be coming off the UK property market with this, the biggest fall in home asking prices that we’ve seen in quite a while, especially in specific parts of the country such as the South West which is cooling faster than most as it had fared better than other places during the pandemic in increase terms.
But we must remember that this index is one that reflects sellers’ asking prices and much of this angst is sentiment related and may well be restored as we begin to see the peak of inflation and interest rates. In other words, this is a reaction to the prospect of a property market decline rather than a decline in itself, albeit we are in danger of that becoming a self-fulfilling prophecy if we are not careful.”
The MD of Barrows and Forrester, James Forrester, said: “The silver lining in the cloud here is that sellers are responding to signals that buyers are demanding lower prices and are prepared to sit things out whilst the market adjusts to recent economic woes.
The fact that those that are selling have re-thought their asking prices in line with buyers’ lower expectations is at least a good thing for estate agents in that this means the gap between buyers’ and sellers’ pricing is now narrower and deals will still be struck accordingly.”
Chris Hodgkinson, managing director of House Buyer Bureau, commented: “Is this the death knell for the property market? Consecutive analysis from a number of house price indexes are now pointing in the same rather negative direction and the picture is bleak.
On an annualised basis we could be looking at drops in value of double figures by the spring and, whilst this will be blood-curdling for homeowners, particularly those that only bought recently, it should sound the starting gun for all those first-time buyers that have sat in the wings bemoaning high prices for years. Now is the time to jump in and grab a bargain.”
CEO of Alliance, the Real Estate Fund, Iain Crawford, commented: “Don’t panic Mr Manwaring. Those that understand markets know that cyclicality always prevails. Any asset goes in both upward and downward directions and the current dynamic is surely an adjustment, yet over the long term we all know that property is a safe investment. Some of us will see the current market decline as an opportunity rather than a problem.”