New data produced by property website Rightmove yesterday shows that property prices are still high and breaking records, despite the economy struggling in recent months.
We, like most financial service companies think that property prices are likely to reach a climax soon and begin to steadily go down due to people finding it more difficult to purchase. And subsequently a lack of interest in purchasing at all. But perhaps this will happen later than we predicted? New data from Rightmove shows that average house prices have hit a record high this month of £371,158.
The research from Rightmove specifically says that the average price of sold houses rose by 0.9% in October 2022, showing that the demand for property is still high even with the rise in interest rates and the cost of living spiralling out of control for many. Even more expensive areas like London are still seeing an increase in the average price of sold properties. However, these figures may be a little deceiving as a 0.9% rise is actually lower than the normal 1.2% that they would have expected to see. But they have said that there is little sign of downwards price pressure on existing properties for sale at the moment.
What Does Rightmove Say?
The report continues to discuss the high rate rises that we have all seen recently, saying:
“Rapid mortgage rate rises understandably cause some new movers to pause their plans and wait to see how the next few weeks unfold. Buyer demand this month is still 20% higher than the more normal market of 2019, but it is down by 15% in the last two weeks compared with the same two weeks last year. The first-time buyer sector appears hardest hit by interest rate increases, with demand in the last two weeks dropping by 21% compared to the same two weeks last year, though it is 24% higher than in 2019. The vast majority of agreed sales are still going ahead. Agents report that buyers are rushing to complete before their lower fixed-rate mortgage offers expire.”
Director at Rightmove Tim Bannister has commented:
“What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues. New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average.
It will take a bit of time for the market to settle to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment. The vast majority of buyers who had already agreed their purchase are still going ahead. Some aspiring first-time buyers will have had their plans dashed by the sudden nature of the mortgage rate rises, and now face a difficult situation with rents also rising, and a shortage of available homes to rent. Buyer demand was already starting to soften and higher interest rates were anticipated, but they’ve been brought forward sharply due to market uncertainties.”
If you or anyone you know wants to discuss property prices, please feel free to give our team a call today.