The housing market is down as buyer demand and spending power is being hit by the cost-of-living crisis and mortgage rates that have soared to 15-year highs in recent months
Asking prices for homes in the UK dipped in the biggest August decline since 2018 this month as surging mortgage costs put buyers under pressure, as per a property website.
Average new seller asking prices dropped by 1.9%, or £7,012, on average to £364,895 in August, said Rightmove.
The decline is more than double the seasonal 0.9% drop in August because of the historical summer downtrend.
The housing market is down as buyer demand and spending power is being hit by the cost-of-living crisis and mortgage rates that have soared to 15-year highs in recent months.
Mortgage deals have mitigated from the peak seen in July, with the average five-year fixed mortgage rate currently at 5.81%, down from 6.08% three weeks ago.
However, demand is still being weighed on across the property market and many sellers are pricing more competitively to attract buyers amid holidays and cost issues.
The property website added that the number of sales being agreed is now 15% lower compared to this time in 2019, with many putting their moving plans on hold.
The FTB sector is 10% lower compared with 2019 as rents have climbed 12%, attracting many to look at getting on the property ladder despite higher mortgage costs.
Tim Bannister, Rightmove’s property expert, said: There are still considerable challenges in saving up enough for a deposit and affording higher mortgage payments. Nevertheless, would-be buyers are now likely to see more property choice in their area and thus a home more likely to suit their requirements than during the covid crisis.
But while there is more option there is no surplus of properties for sale, with the number of available properties still lower than at this time in 2019 and homes still selling more quickly, with the average time to find a buyer now 55 days compared to 61 days in 2019, Bannister said.
He said: While a 1.9% decline in just one month appears dramatic, it is in part an expected seasonal decline as sellers coming to market realise that they have to compromise on price because of the historically leaner summer holiday period.