As the summer months progress, the UK’s housing market consistently experiences a seasonal decline in property prices. To gain a deeper understanding of this recurring trend, I engaged in an insightful discussion with Laura Preston, a senior analyst at Rightmove. Our dialogue unveiled the latest movements and trends in property prices, offering valuable perspectives for prospective buyers, sellers, and investors.
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“Every year, we observe a modest lull in the housing market during the summer months,” Laura began, her tone both professional and welcoming. “This year is no exception, with average asking prices dropping by 1.5% in August. This pattern has been consistently noted for the past 18 years.” Laura’s data highlighted that the average asking price of properties new to the market fell to £367,785 in August, down from £373,493 in July. Although this £5,708 decline may appear substantial, it is a predictable part of the seasonal cycle.
“August is characteristically a quieter month for property transactions,” Laura elaborated. “Many individuals are on holiday, leading to reduced urgency in the market. Sellers frequently adjust their asking prices to attract the fewer buyers who are actively searching.” Despite the summer dip, there are encouraging signs for the future. The Bank of England’s recent decision to lower the Bank Rate from 5.25% to 5% has already begun to invigorate market activity. “We’ve observed a 19% increase in the number of potential buyers contacting estate agents since the rate cut on 1 August,” Laura noted. “This is a significant jump compared to the 11% increase observed in July.”
The rate cut has not only bolstered buyer confidence but also encouraged more sellers to enter the market. Rightmove reports a 5% increase in new sellers putting their homes on the market compared to the same period last year. This influx of new listings is anticipated to create a more dynamic and competitive market as we transition into autumn. “Our forecast for house price inflation in 2024 has shifted from a predicted 1% drop to a 1% increase,” Laura revealed with a note of optimism. “The conditions are ripe for a more active autumn market, especially as mortgage rates begin to stabilise and even decrease in some instances.”
Regionally, the picture varies. While asking prices fell in most areas in August, Yorkshire and Humberside defied the trend with a slight increase of 0.3%. Over the past year, Yorkshire has experienced a robust 3.5% rise in asking prices, with the average home now priced at £252,835. However, not all regions have performed as well. The East of England, South West, and South East have all experienced annual price drops. “The East of England saw a 1.4% decrease, with average asking prices now at £418,295,” Laura detailed. “In the South West, prices are down by 2.4%, and in the South East, they’re down by 1.2%.”
London’s market remains an exception, with asking prices up by 0.7% in August, although still 2.1% lower than a year ago, with the average property valued at £677,794. “London always has its own dynamics,” Laura remarked. “While prices have dipped year-on-year, the slight monthly increase indicates a potential rebound.” The market’s resilience is further evidenced by industry experts’ comments. Jeremy Leaf, a north London estate agent, noted the positive impact of the Bank Rate cut: “There is no doubt the cut has been a shot in the arm for the housing market, particularly in terms of new enquiries during the traditionally quiet summer period.”
Matt Thompson, head of sales at estate agent Chestertons, echoed this sentiment. “Despite the summer holidays, we’re seeing more house hunters starting or resuming their search compared to last August. The lower interest rates and more attractive mortgage products are enticing even first-time buyers to take the plunge.” As our conversation concluded, Laura emphasised the importance of staying informed and adaptable in the current market. “Whether you’re buying, selling, or just keeping an eye on the trends, it’s crucial to understand the broader market dynamics. The summer dip is temporary, and the autumn could bring new opportunities.”
For those considering their next move, the message is clear: the UK housing market remains robust and full of potential, despite seasonal fluctuations. With interest rates stabilising and buyer activity on the rise, the coming months could herald a return to growth and dynamism.
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