The average price of property coming to the market has dipped as new buyers hold off to wait for more financial certainty amid rising mortgage rates.
Newly-marketed homes were 1.1% cheaper in November, with an average price tag of £366,999, as sellers price more competitively to try to find a buyer in the last months of the year, according to Rightmove.
This allowed buyers to save £4,159 compared to October. Last month, 8% of unsold properties on Rightmove were reduced.
The property site said some new buyers appear to be holding off to wait for more financial certainty, while others who were already stretching themselves have now had to pause.
“The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain, but what is certain is that the exceptional price growth of the last two years is unsustainable against the economic headwinds and growing affordability constraints,” Tim Bannister, Rightmove’s director of property science, said.
“Home-owners who come to market in the final few months of the year tend to price lower to attract buyers in the lead-up to Christmas, and we’re hearing from agents that both existing and new sellers understand that to sell in the current market they need to price competitively.
“During the market frenzy many agents said that they had to rip up the rule-book on valuing properties due to bidding wars, but now they’re back in more familiar territory, and pricing right first time is even more critical to securing a quick sale.”
Buyer demand is still up by 4% on the more normal market of 2019, but down by 20% on October last year.
First-time buyer properties continue to be the most affected sector, with year-on-year demand down by 26% in October, as it faces the biggest challenges after the sudden jump in mortgage interest rates.
Second-stepper demand is down by 17%, and top-of-the-ladder is down by 15%.
“The now largely superseded mini-budget sped up the slowing of market activity that we had been seeing since the summer, and we’re now in another state of limbo as we wait for any surprises or help in Jeremy Hunt’s Autumn statement on Thursday,” Bannister added.
“The frenzied market of the past two years has turned into a more normal market more abruptly and less smoothly than we were expecting.
“Though many are getting on with moves, especially those with a purchase already agreed, understandably there are people who are pausing for thought. Some buyers have decided to turn their attention to Christmas instead, and be part of the New Year jump in home-moving activity.”