The average asking price of newly-listed properties for sale has risen by 0.7% this month to £367,440, the first increase to asking prices since May, the latest Rightmove figures show.
The increase to prices is also larger than the ten-year September average of 0.5%, which is an early sign of the usual Autumn market bounce after a subdued summer.
September is traditionally a busier period for the housing market as potential movers return from summer holidays and refocus on buying and selling plans for the rest of the year, and so seasonal factors are largely at play for the monthly increase. Several heatwaves and the World Cup also created conditions for a particularly quiet summer this year, giving some scope for a greater rebound in prices as more buying activity returns for the Autumn.
However, there is considerable ground to make up after this summer’s run of monthly falls. Prices remain 0.8% below this time last year, and 2.3% below where they were at the start of summer. It’s a challenging and crowded market for sellers, with the number of homes available on the market for sale at a 12-year high for the time of year and buyer affordability still stretched.
Rightmove's data has also recorded the expected seasonal bounce in home-moving activity from August into September. However, buyer demand is still 9% below this time last year as many buyers grapple with affordability challenges.
The average two-year fixed mortgage rate is now 5.29%, up from 5.09% last month, and 4.25% before the war in Iran started. The average monthly payment on a new mortgage is now around £180 more than it was before the war started at the end of February.
Meanwhile, the number of new listings coming to market is flat month-on-month, and 3% lower than at this time last year, while the number of sales being agreed is 9% lower than last year.
The combination of fewer newly-listed properties than last year, a 12-year high overall number of available properties, and a 9% reduction in agreed sales annually, is strong evidence of a very price-sensitive market.
On average, a home that’s on the market for sale has a 6 in 10 (61%) chance of successfully finding a buyer. This compares to a nearly three-quarters chance (74%) in 2021, which was a frenetic market driven by high demand and short supply.
While pricing is currently key to attracting affordability-stretched buyers who have a lot of choice, there are also regional forces at play. In Scotland, 9 in 10 (91%) of homes for sale are currently finding a buyer, which is partly due to the greatly different buying and selling laws and practices. In North West of England, where lower prices aid affordability, 71% of homes find a buyer, versus 56% in the more expensive South East. In London, where affordability is the most stretched and there is a larger mismatch between supply and demand, the equivalent figure is only 42%.
Rightmove says accurate and competitive initial pricing is the number one critical factor in securing a sale, with its data showing 74% of homes that have sold so far this year were priced right first time and didn’t need a subsequent asking price reduction.
Colleen Babcock, property expert at Rightmove, commented: “September’s above-average price rise is a welcome sign of confidence after a particularly subdued summer, but it should be viewed as a modest recovery rather than a major turning point. Property prices have largely underperformed against the long-term average this year, but September is an exception. While buyers and sellers are returning to the market after the summer holidays to potentially fuel an Autumn bounce, sellers face stiff competition from a 12-year high number of other homes for sale. With a large crowd of sellers chasing a smaller number of buyers, realism on pricing or a high-quality finish are absolutely key to attracting a buyer and making a sale.
“It's encouraging to see more buyers returning to the market as we move into Autumn, with activity picking up as usual after a subdued summer. Whilst almost two-thirds of homes are still successfully finding a buyer, the chances of selling vary significantly depending on where you live. Over 90% of homes that come to market for sale are selling in Scotland versus less than half in London, meaning those who want to sell will have to set their pricing according to local market conditions. Buyers continue to have plenty of choice and mortgage rates are increasing, so competitive pricing is still the biggest factor in attracting interest and securing a sale. Sellers who get the initial asking price right are giving themselves the best chance of standing out in a crowded market.”
