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Average house prices see smallest October rise since the financial crisis

Average house prices see smallest October rise since the financial crisis
Shekina Tuahene
Written By:
Shekina Tuahene
Posted:
17/10/2023
Updated:
17/10/2023

The average asking price rose by 0.5% in October to £368,231, a property search portal reported.

According to Rightmove, the increase was lower than the 1.4% average typically seen during the month and the lowest growth since 2008. 

In monetary terms, average new seller asking prices were £1,950 higher than in September. 

Annually, asking prices fell by 0.8%. 

Rightmove said sellers who were not adjusting to the market were struggling to secure buyers, and agreed sales were 17% lower than last year. 

The share of homes sold subject to contract fell from eight out of 10 properties to six. The firm said buyers were still active in the market, but were looking for homes at the right price. Its analysis found that properties that were initially priced too high tended to be less popular even after a price reduction. 

Tim Bannister, director of property science at Rightmove, said new seller asking prices rose during the month as usual, but the subdued increase showed that sellers were taking the advice of agents and adjusting their expectations to suit the post-pandemic, lower activity market. 

The number of buyers enquiring about each available home was 8% up on pre-pandemic levels. 

Sarah Coles, head of personal finance at Hargreaves Lansdown, said this was the “most listless October bounce since the financial crisis”. 

She added: “We usually see buyers spring back to the market after the summer holidays, keen to snap up a property before Christmas. This year, there’s every sign we’ve gone from the summer holiday lull to winter hibernation, with very little bounce in the interim.” 

Coles said overpriced properties failed to capture interest and made buyers believe that if they waited, prices would fall further. 

The price is right 

Rightmove said right priced homes tended to secure a buyer in less than half the time than properties which needed a reduction. It also noted that the sales were less likely to fall through. 

The firm also noted that homes that received a buyer enquiry on the first day of marketing were 60% more likely to be marked sold subject to contract than properties that got an enquiry after two weeks. 

Rightmove said the more stable mortgage market was also injecting some confidence into the market.  

Bannister added: “Mortgage rates continue to trend in the right direction and have now dropped for 11 consecutive weeks, with buyer affordability gradually improving compared to this time a year ago. Those with a larger deposit have seen the biggest benefit from recent rate drops, with rates for those with a smaller deposit, typically those further down the housing ladder, not dropping as quickly.  

“The mortgage market is much more stable right now compared to three months ago, giving movers a little more assurance over the rate they are likely to be offered and therefore what they are likely to be able to afford.”