Asking prices for UK homes have dropped 1.7% in November as sellers cut prices to attract a buyer.
New sellers listed their homes for £362,143 on average in November — £6,088 less than the previous month, according to property site Rightmove.
Asking prices usually drop in November as sellers price more competitively in the lead-up to Christmas. However, the 1.7% drop in asking prices is the largest in five years for this month.
“We are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition,” Tim Bannister, Rightmove’s director of property science, said.
“Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates,” he added.
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“It now looks like more sellers are understanding Rightmove’s research; that the chances of securing a buyer are much greater if they price right the first time, rather than over-pricing and reducing their price later.”
The cut in asking prices appears to be working, with the number of sales being agreed now 10% below the same period in 2019, an improving from being 15% below 2019’s level last month.
However, Brits are buying smaller properties as the cost of living continues to squeeze UK households. The number of sales being agreed in the smallest homes sector, like studio, one-, and two-bed properties, is just 7% lower than 2019’s level, compared to the largest homes where agreed sales are 14% behind 2019. This sector is comprised of four-bed detached houses and all properties with more than five bedrooms.
“Record rents have made it difficult for would-be first-time buyers trying to save up their deposit and get onto the ladder from the rental market,” Ian Preston, managing director at Preston Baker in Yorkshire, said.
Meanwhile, there are yearly price declines in the Midlands and all Southern regions, however the more affordable areas of Wales, Scotland and the North of England have seen asking price rises, as the changed market conditions affect local housing markets in different ways.
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In London, Richmond upon Thames has bucked the trend with asking prices in this borough rising by 1.7% compared to October. Sellers in this area are asking an average of £963,068.
Lewisham has seen an even greater increase, with average asking prices rising 2% to £519,928.
The most affordable borough in London, looking at asking prices, is Barking and Dagenham, where sellers are asking £372,016 on average.
The Bank of England has held interest rates at 5.25% for a second time in a row following a run of 14 consecutive increases.
This hold might bring some relief to homeowners and prospective buyers but the rate is still at its highest level for 15 years.
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