Rightmove has released its latest asking price data, revealing a larger-than-normal seasonal slowdown in property prices. However, Rightmove estimates that the market will be stronger in 2025 with regards to both prices and the number of homes sold, particularly if mortgage rates keep falling.
The number of sales being agreed continues to track positively against the quieter market of this time last year and is now 26% ahead of the same period in 2023. Meanwhile, the number of new sellers coming to the market is 6% ahead of the same period a year ago.
However, the average price of property listed for sale is down by 1.4% this month (-£5,366) to £366,592. This is the second month in a row that new seller pricing has fallen more than the norm, with the usual drop seen at this time of year being 0.8%.
Despite this, the sustained strong sales market compared with last year and optimism for lower mortgage rates in 2025 have led to Rightmove forecasting a 4% increase in average new seller asking prices next year. Despite this prediction, the market is expected to remain price-sensitive, and sellers are currently competing with a decade-high number of other sellers to attract a buyer.
Market comment
Tim Bannister at Rightmove says: “There’s been a lot of news to digest for home-movers over the last few weeks and it appears that the market may still be chewing it over. We had been seeing a drop-off in buyer demand, both in the lead-up to the Budget and in its immediate aftermath, as it was confirmed that there will be an increase to stamp-duty charges for most home-movers and second-home buyers, and some first-time buyers.
“However, a second Bank Rate cut and a boost of optimism regarding 2025 appear to have reversed this trend at least temporarily. Zooming out of these short-term trends, the big picture of market activity remains positive when compared to the quieter market at this time last year. This sets us up for what we predict will be a stronger 2025 in both prices and number of homes sold, particularly if mortgage rates fall by enough to significantly improve affordability for more of the mass-market.
“Despite the post-Budget gloom, the market is more positive than last year, with average asking prices currently 1.2% higher than in 2023, in line with our forecast of a 1% increase for 2024. The speed at which mortgage rates come down next year will be key in determining activity levels for some of the market’s traditionally busiest periods, and sellers will still need to price temptingly enough to secure a buyer while the choice of homes for sale remains as high as it is right now.”
Nathan Emerson, CEO at Propertymark, comments: “The Bank of England’s recent cuts to interest rates are likely to spur on more movement and further stimulate the market. With many buyers in England and Northern Ireland looking to move quickly before the Stamp Duty rises in April, we could see more people willing to accept heavier negotiations than normal, which could result in a small dip in the average house price. With the potential of a rise in the volume of transactions on the horizon, we would anticipate a spiked shift towards the improvement of the overall health of the economy.”
Kevin Shaw, national sales managing director at Leaders Romans Group, says: “Since the Budget and subsequent interest rate drop, there has been no obvious spike in sales numbers, although there has been a slight uptick in demand. Decisions are being made now before the buildup to Christmas, as buyers are more likely to get price flexibility from sellers now rather than in the New Year. This presents a good opportunity to negotiate, as there will certainly be more people looking in January after the Christmas break and usual surge in enquiries on Boxing Day. There is some uncertainty following hikes in National Insurance and the minimum wage. There has been a lot of change in the last couple of weeks, so I think time will tell. It’s definitely an interesting time in the market but as we go into 2025 we expect market sentiment to improve further.”
Lastly, Alastair Cochrane, group sales & operations director at estate agency Stirling Ackroyd, comments: “Now is a good time to list, as most people traditionally hold off at this time of year from coming to market, believing that buyer activity is lower. Committed buyers are still offering and purchasing, and for some sellers who have a property that could attract a first-time buyer, the window of opportunity is closing for them to use the stamp duty relief, so now would be a good time to take action.
“For investors, the increased stamp duty does present an initial barrier, and maybe those considering an investment property will recalibrate offer prices to take into account additional costs. Overall yields have increased with rising rents, which should give investors some comfort despite increases in stamp duty.”
