The property market is always a landscape of fluctuating trends and evolving patterns. As we bid farewell to 2023, a year that defied some expectations, the narrative of property prices and buyer-seller dynamics has been an intriguing one.
In the recent data release, it's evident that the average new seller asking prices took a dip of 1.9% this month, amounting to a staggering £6,966 drop, with the current average standing at £355,177. While it's not uncommon for selling prices to dip in December due to seasonal influences, this decrease surpasses the 20-year average drop of 1.5%. Sellers, aiming to stay competitive, seem to be fuelling this sharper decline.
However, amid this apparent drop, the 2023 market has showcased a surprising resilience, transitioning gradually from the frenzy witnessed in previous years to a more normalised state. Despite the drop, new seller average asking prices merely ended the year 1.1% lower than the previous year. Impressively, sales agreed upon in this more challenging market of 2023 are only 13% lower than the same period during the frenetic highs of 2022.
Regionally, the nuances of this market transition are clearer. Seven out of 11 regions have experienced price hikes compared to the previous year. The North West stands out, boasting a 1.5% increase, while the South East falls slightly behind with prices down by 3.7% from 2022.
There's an interesting shift happening too—a sign that stable market conditions might entice more family movers to return. Many families had postponed their plans due to the uncertainties stemming from last year's mini-budget fallout. Factors like the consistent fall in average mortgage rates for 19 consecutive weeks contribute to this stability. For instance, the average 5-year fixed mortgage rate has dropped from 6.11% in July to 5.11% now, adding appeal to prospective buyers.
Moreover, buyer demand, especially in the mid-market and second-stepper sectors, is notably higher compared to the post-mini-budget period of the previous year. While overall buyer demand has risen by 6%, the mid-market segment has surged by an impressive 9%. This surge follows a period where some potential movers chose to wait for calmer market conditions.
Looking ahead to 2024, the giant that is Rightmove predicts a national average drop of 1% in new seller asking prices. Motivated sellers, it suggests, might still need to strategically price their properties below local competition to secure a sale, considering the stretched affordability for buyers.
The 2023 property market has been a testament to adaptability and resilience, showcasing shifts that signal a more stabilised environment. As we step into 2024, these nuanced trends and forecasts paint a dynamic picture of what lies ahead.
And finally, a view from Rightmove’s Director of Property Science, Tim Bannister:
“Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively. We entered this year under a cloud of uncertainty, as the fallout from the Autumn mini-budget filtered through to lower activity levels. High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year. However, for now, there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much-better-than-predicted resilience this year.”
Stay tuned for more insights and updates as we navigate the twists and turns of the property market in the coming year.
*Statistics gathered from the Rightmove House Price Index