Asking prices for UK homes suffer sharpest August drop since 2018


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Asking prices for UK homes recorded their sharpest August drop since 2018, in another sign that the property market is slowing after four consecutive months of house price falls.

New sellers listed their homes for £364,895 on average in the five weeks to August 12, £7,012 less than in the previous month, representing the biggest fall at this time of the year since the Covid-19 pandemic, according to data from property portal Rightmove.

The drop in asking prices comes at a time of record wage growth and easing mortgage rates, suggesting tentative signs of improved affordability for UK homebuyers who have been hit with high borrowing costs after successive interest rate rises by the Bank of England.

The average house price fell 0.3 per cent in July, according to lender Halifax, and most analysts expect house prices to continue to fall throughout the year.

Despite the 1.9 per cent drop in asking prices, average house prices remain nearly 20 per cent higher than before the Covid-19 pandemic in August 2019, Rightmove said.

“There are still significant challenges in saving up enough for a deposit and affording higher mortgage payments,” said Tim Bannister, director at Rightmove.

“However, would-be buyers are now likely to see greater property choice in their area and therefore a home more likely to suit their needs compared to during the pandemic,” he added.

Regular pay, which excludes bonuses, rose 7.8 per cent annually between April and June, according to data published last week by the Office for National Statistics.

Meanwhile, the average five-year fixed mortgage rate has fallen to 5.81 per cent, down from 6.08 per cent at the end of July, according to Rightmove. Mortgage experts, however, warn that rates are unlikely to fall back below 5 per cent this year.

Nicholas Mendes, mortgage manager at John Charcol, said the easing in mortgage costs had “only softened the blow” for households whose budgets had been stretched in the past year and that affordability would remain a hurdle for prospective homebuyers.

“Realistically, income multiples need to be much higher when you consider the average wage and property price, unless you can raise a substantial deposit,” he said, adding that buyers were increasingly opting for less desired, cheaper areas.

The number of agreed sales in the period was 15 per cent lower than in 2019 in the period, Rightmove said, as high borrowing costs hit sales.

However, agreed sales for properties that typically attract first-time buyers were more resilient, the data showed, with sales down only 10 per cent in the same period. 

Asking prices for homes that attract first-time buyers fell 1 per cent annually, while average advertised rents for similar homes jumped by 12 per cent, Rightmove said.

“The prospect of owning your own home remains an appealing option for those that can afford it, with the alternative being an extremely frenzied rental market, where rents are at record levels,” said Bannister.

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Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

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