Recent findings from Rightmove have shown that vendors (those selling properties) are cutting their asking prices at the quickest pace we’ve seen in over ten years. This action is a response to the sharp rise in interest rates, which has weakened the property demand this summer.

Of the homes currently listed on the market:

• A staggering 36% have experienced at least one price drop. To put this into perspective, before the pandemic hit, this figure stood at an average of 31.2%.
• These reductions average at 6.2%, the steepest since the beginning of 2011. In terms of actual financial implications, this reduction shaves more than £22,000 from the average property asking price.

Voices from the Field: Expert Reactions

The property market’s ups and downs aren’t just numbers on a screen; they have real-world consequences and inspire varied sentiments among industry professionals. Property Industry Eye rounded-up the thoughts of several experts on the latest Rightmove house price news.

Tom Bill (Knight Frank) on Market Stability

Tom Bill, a prominent figure in UK residential research at Knight Frank, expressed concern about the recent market volatility’s impact on buyer confidence. While he pointed out the silver linings—a resilient jobs market, lenders being flexible, and fixed-rate deals’ popularity—he remained cautious about the market’s immediate future. He doesn’t foresee an abrupt crash in prices but expects a decline in single digits both this year and the next, primarily due to adjustment to borrowing costs and the forthcoming general election.

Andy McHugo on Potential Upticks

Andy McHugo, from McHugo Homes, shared his observations from two decades of selling homes. He described the summers of 2020 and 2021 as notably calm, attributing it to travel restrictions and the existing economic environment. However, he also noted an increase in market inquiries since September began, giving a hint of optimism for the coming months.

Jeremy Leaf’s Reality Check

Jeremy Leaf, a seasoned estate agent in North London, expressed his surprise that the drop in asking prices wasn’t even steeper. Emphasizing the distinction between asking and selling prices, he highlighted the influence of continuous interest rate hikes. But Leaf also shared a glimmer of hope, noticing an uptick in property listings and buyer interest recently, especially from motivated sellers.

Adam Feather’s Warning to Sellers

Adam Feather, who oversees Robert Anthony Estate Agents, emphasized that with fewer properties being sold and growing mortgage borrowing costs, sellers must manage their expectations and be realistic with their listing prices.

Tomer Aboody on Interest Rates

Tomer Aboody, a director at MT Finance, commented on the persistent interest rate hikes over the last year. He noticed a slowdown in August, but an increase in transactions in September, as buyers come to terms with the market’s current state. His hopeful take is that once interest rates stabilize, the market will rebound, bringing with it renewed confidence and more transactions.

Final Thoughts

The UK property market is currently in a state of adjustment, responding to both national and global economic shifts. For potential investors, understanding these trends and expert insights can guide more informed decision-making. It’s crucial to remain updated, flexible, and strategic, particularly in such volatile times.