Selling prices dipped in August as would-be buyers put off home-buying plans amid summer holidays, figures on Monday showed.

Rightmove’s House Price Index showed the average asking price fell 1.5% to £367,785 in August, in-line with the 20-year average during the typically quiet month.

In addition to seasonal slowness, those who did enter the market in August were likely urgent to sell, pricing more competitively and pushing down prices overall, Righmove explained.

Despite the monthly slide, August prices are 0.8% higher than they were a year ago, and with the market’s focus on the Bank of England’s recent rate cut, Rightmove expects the market is gathering energy for Autumn.

‘While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment. As the summer holiday season comes to an end, the conditions are there for a more active autumn market,’ said Rightmove Director of Property Science Tim Bannister.

As a result, Rightmove now expects new seller prices to rise 1% over the whole of 2024. It previously expected a 1% drop.

While it is an improvement, Rightmove says a few more cuts are needed before home-buyers see a real shift in mortgage rates.

‘However, though optimism around the direction of mortgage rates is justified, the reality is that they are still very high compared with a few years ago, and there will be some who need rates to drop further before their affordability is notably improved. Buyers are still stretched, and so sellers mustn’t get too carried away by the higher buyer activity levels compared with last year, and continue to come to market with a competitive price.’

The average five-year fixed mortgage rate is 4.80%, Rightmove noted, an improvement on the 5.82% average rate at this time last year, though still higher than it was before the BoE upped rates in 2021. It said the best available five year fixed rate is 3.83% with a 40% deposit, the lowest it’s been since September 2022.

Looking ahead, Rightmove noted economic uncertainties, but maintained its largely positive outlook.

‘We expect small price rises in the autumn, followed by the usual seasonal monthly falls in prices at the end of the year. Though there are still some uncertainties ahead – October’s Budget, the timing of a second bank tate cut, and the US economy to name just three - the scene is now set for a positive remainder of the year. The number of sales being agreed between buyers and sellers continues to track very positively at 16% ahead of last year, and the number of new sellers coming to market is now a stable 5% ahead of this time last year.’

Copyright 2024 Alliance News Ltd. All Rights Reserved.