The first monthly drop in asking prices of the year, a nominal £82, showed up on Rightmove’s June housing market index which placed the average asking price at £372,812. It is the first June asking price drop since 2017.

The number of sales has also fallen by 6% compared to the same two-week period in June 2019, a consequence of the recent increases in mortgage rates. But buyer demand has remained resilient and, over the last two weeks, is 6% higher than the same period in 2019 which is considered to be the last comparatively normal market.

Annual house price growth has slowed from 1.5% in the 12 months to May, to 1.1% in June.

More visits to Rightmove’s mortgage checker service, a jump of 53% since the latest unexpectedly high inflation figures, however, indicates uncertainty among movers who have been watching rates climb once again.

The average rate for a five-year fixed rate at 85% loan-to-value mortgage is 5.20%, up from 4.56% four weeks ago.

This increase means that a new buyer purchasing a property at the current average asking price would now expect to pay an extra £117 per month if repaying the mortgage over a 25-year term.

The base rate is currently 4.5%. Another base rate rise is highly anticipated later this week.

Spring bounce turns to summer slowdown

Tim Bannister, Rightmove’s director of property science, said: “Average new seller asking prices, the first and leading indicator of new trends in the market, have dropped slightly this month, signalling that the belated spring price bounce has quickly turned into an earlier than usual summer slowdown. We expect asking prices to edge down during the second half of the year which is the normal seasonal pattern, and while we sometimes re-forecast our expectations for annual price changes at this time, current trends suggest that our original forecast of a 2 percent annual drop in asking prices at the end of 2023 is still valid.”

Rightmove states that estate agents are reporting two camps of new sellers who come to the market; those with over-optimistic price expectations following the buoyant pandemic market, and those who have adapted to the new conditions and are coming to market with a competitive price.

“Sellers who price competitively are much more likely to find a suitable buyer quickly before their home appears stale, and they can often then negotiate on price on any onward purchase,” added Bannister.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “As expected, recent mortgage market turbulence is dampening the increase in prices and activity which we would usually see at this time of year.

“However, these are, of course, only aspirational not achieved values. On the street, prices are softening as cash and equity-rich buyers in particular continue to hold sway over those relying on increasingly hard-to-obtain loans. Negative publicity is helping lower expectations and encourage more seller realism.”