The average new seller asking price increased by just 0.3%, or £1,199, this month to hit £371,958, new Rightmove figures show. This is much lower than the average seasonal 1.3% monthly increase at this time of year
The figures provided by the property portal also reveal that the number of sales being agreed is up by 29% year-on-year, a strong rebound from the weaker market a year ago.
Underlying buyer demand remains strong, with the number of people contacting agents about homes for sale up by 17% compared with this time last year, despite some uncertainty caused by the Autumn Budget
The number of available homes for sale is 12% higher than a year ago – and the highest per estate agent since 2014, intensifying competition to find affordability-stretched buyers, some of whom may also have pre-Budget jitters
The outlook remains positive for 2025, but affordability pressures remain, and some buyers may be waiting for Budget clarity and cheaper mortgage rates before acting:
Rightmove’s Tim Bannister said: “This month’s subdued price growth comes as buyer choice soars to a level not seen since 2014. With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched.
“Some sellers appear to be acting on this caution, contributing to limited price growth and better buyer affordability. This is helping to keep the number of sales being agreed consistently and strongly ahead of the quieter market of this time last year.
“We’re not seeing activity slow down, but some estate agents report that some movers are now waiting for Budget clarity and anticipated cheaper mortgage rates later this year. However, others state that movers are largely just getting on with plans.”
Competition for buyers is particularly intense at the top-end of the market, where the number of four-bedroom detached houses and five-bedroom-plus homes available for sale is 17% ahead of last year. It’s a buyer’s market, reinforcing the need for sellers to price competitively while affordability is stretched and choice is high.
After a long run of mortgage rate drops helped by the August Bank Rate cut, rate falls are stalling for the moment against a backdrop of geopolitical tension. The average five-year fixed mortgage rate is now 4.61%, up slightly from 4.55% last week, the first weekly increase since May. Though this is still a big improvement from the average of 6.11% at the peak in July 2023, and is only a very slight increase, the upward swing in rates may be a dent to home-buyer confidence.
Rightmove’s Energy Bills Tracker also highlights the impact that rising energy prices are having on household finances. As an example, the average annual energy bill for a home with the typical Energy Performance Certificate (EPC) rating of D, is £2,465, up by 10% or £224 compared to September due to the price cap increase at the start of this month.
Despite these affordability pressures, there are positive signs for 2025. The financial markets are still predicting two Bank Rate cuts before the end of the year. If these go ahead, it is expected that further mortgage rate cuts should follow. While mortgage rates are not expected to return to the ultra-low levels of recent years, further drops when combined with wage rises and muted house price growth would be a big step forward for home-buyer affordability.
Bannister added: “Despite a Budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025. Market activity remains strong, despite affordability pressures on movers. Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the Summer.
“Affordability is still the biggest barrier facing many movers, with mortgage rates still high, so if the expected two cuts come to fruition it could be the boost that many buyers-in-waiting need. 2025 could see the return of the previously priced out buyer.”