1.9% percent summer price drop as stretched affordability begins to improve

Rightmove’s latest data shows average new seller asking prices fall by 1.9% (-£7,012) this month to £364,895, the biggest fall in August since 2018, as summer sellers tempt buyers preoccupied by holidays, inflation, and the highest Base Rate since 2008. These lower asking prices, combined with increasing average earnings and the apparent downward trend of mortgage rates are tentative steps towards improved buyer affordability, although average prices are still £59,000 (19%) higher than in the pre-pandemic market of August 2019. The average five-year fixed mortgage rate is now 5.81%, falling from 6.08% this time just three weeks ago and currently showing signs of an improving trend.

Rightmove data shows that homes which are priced right from the outset take less than half as long to find a buyer than those which require a subsequent asking price reduction.

Average asking prices are now £8,000 (2%) lower than at their peak in May, but this must be placed in the larger context of significant price growth over the past four years, with average prices still £59,000 (19%) higher than in August 2019. Lower asking prices when combined with higher average earnings and the apparent downward trend in mortgage rates are tentative steps on a journey towards better buyer affordability. The average five-year fixed mortgage rate is now 5.81%, down from 6.08% this time just three weeks ago and is currently showing tentative signs of further improvement.

Tim Bannister Rightmove’s Director of Property Science says: “There are still significant challenges in saving up enough for a deposit and affording higher mortgage payments, however would-be buyers are now likely to see greater property choice in their area and therefore a home more likely to suit their needs compared to during the pandemic.”