According to the latest analysis from Rightmove, asking prices for properties rose by an average of £1,950 this month.
Although new listing prices typically rise at this time of year, October’s 0.5 percent increase is the smallest October increase since 2008, according to Rightmove.
Based on the last 20 years, the average increase at this time of year is 1.4 percent.
Take your time: Rightmove says the number of agreed sales is 17% below this time last year as buyers take a wait-and-see attitude
The average asking price for new October listings on Rightmove is £368,231. However, this value can be significantly higher than the final selling price for houses.
Rightmove says that looking back at all the homes advertised on its website since the start of the year, a total of 37 per cent of all listings have had their asking price reduced.
It also says that, on average, homes sell for 4 percent less than their final asking price.
Sellers value homes too high
While newly listed asking prices are just 0.8 percent lower than this time last year, transaction levels appear to have taken the biggest hit.
According to Rightmove, the number of sales agreed is 17 percent lower than the same time last year.
It says sellers who are unwilling to lower their asking prices to reflect current levels of activity will find their homes sitting on the shelf.
Although asking prices are rising this month, agents report that prices for many properties are too high, resulting in many properties having to be reduced if they do not sell.
Seasonal low: According to Rightmove, the 0.5 percent increase in October is the smallest increase in October since 2008
Ben Gee, founder of Berkshire estate agent Hat and Home, said: “A significant proportion of sales orders experience at least one reduction before the sale, as many buyers take a wait-and-see attitude, which creates inertia across all price ranges.
“Premium stocks in excellent condition or in the most sought-after locations continue to quickly attract strong interest, but mass market properties must offer “good value for money” as buyers have more properties to choose from and are more price sensitive.
“Ambritious asking prices exacerbate the situation and only slow the pace of sales as properties are offered to the wrong audience until a price correction is made.”
The proportion of homes finding a buyer has fallen from eight in 10 during the market’s peak in early 2022 to a more subdued sales rate of six in 10.
If a property for sale receives its first buyer inquiry on the first day of marketing, rather than two weeks, Rightmove data shows that a property is 60 per cent more likely to find a buyer.
Competitively priced properties manage to find a buyer in less than half the time it would take when properties need a discount, and if they do find a buyer, the sale is also 50 more likely to fall through percent lower.
This suggests that sellers should shy away from “testing” a higher price on the assumption that they can lower it later without hurting their chances of selling.
Agents report that the most successful sellers are those that stand out from other properties for sale and are more competitively priced.
Regional differences: Some regions of the UK saw new asking prices fall this month: the South West, West Midlands and Scotland saw falls of 1% or more
Ben Hudson, managing director of York estate agent Hudson Moody, said: “The market is more price sensitive than ever before, which is why accurate pricing is so important.”
“An overly optimistic asking price creates a double disadvantage for sellers – not only do they inevitably have to lower the price of their home anyway, but they often scare potential buyers away with an initial asking price that is too high and then have difficulty getting that back.” attention , when it is reduced.
“Sellers who set a realistic or even somewhat modest price often find that they come across more than one buyer who is attracted by the competitive pricing, and then they suddenly have competition to purchase the property, which is usually too results in a higher agreed price.”‘
Buyers are making more inquiries as they seek value
Although mortgage rates are now much higher than they were in 2019, the number of buyers inquiring about each home for sale is 8 per cent higher than at the same time four years ago, according to Rightmove.
According to Rightmove’s Tim Bannister, this suggests buyers are still active in finding the right property at the right price.
He adds: “In a market that real estate agents are describing as the most price-sensitive ever, buyers are likely to be looking for homes that they believe offer excellent value for money, and to attract one of these motivated buyers, sellers must Set the price right the first time.’
Delay: A significant portion of sales orders experience at least one reduction before the sale, with many buyers taking a wait-and-see approach, according to a real estate agent
The average two-year fixed-rate mortgage has fallen from a high of 6.86 per cent (at the end of July) to 6.37 per cent, according to Moneyfacts data.
Those setting five-year terms saw average interest rates fall from 6.37 percent to 5.92 percent over the same period.
However, homebuyers can do much better than average. The cheapest two-year fixes are currently around 5.25 percent, while five-year fixes can be as high as 4.74 percent.
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“Mortgage rates continue to trend in the right direction and have now fallen for 11 consecutive weeks, with affordability for buyers gradually improving compared to this point a year ago,” says Bannister.
“Those with a larger deposit have benefited most from the recent rate cuts, while those with a smaller deposit, typically those further down the property ladder, will not see rates fall as quickly.”
“The mortgage market is currently much more stable than it was three months ago, giving movers a bit more certainty about what interest rate they are likely to be offered and therefore what they can likely afford.”
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