A significant number of vendors are pricing realistically in light of the fact that demand for property remains weak and is unlikely to pick-up in the coming months.

Average new seller asking prices dropped by 1.7%, or £6,088, this month to £362,143, as Christmas approaches and sellers continue to adopt more pricing realism to attract a buyer, Rightmove said.

According to the property portal, sales agreed are now 10% below 2019’s more normal market level, improving from 15% below last month.

As we approach the end of 2023, key indicators point to a market that while challenging, has been more positive than many predicted.

Industry reactions:

Agents’ Views

Matt Nicol, managing director at Nicol & Co., commented: “Picking the right agent to help with the right price for a home is so vital for sellers at the moment. Buyers have much more choice than a year or two ago, meaning if sellers price too optimistically, buyers are going to look towards their more competitively priced neighbours. However, we are starting to see more pricing realism from sellers compared to a few months ago, and activity levels are positive so far in November.

“There are certainly still buyers out there ready to take the leap if the price is right. Two consecutive Base Rate holds, much steadier fixed-rate mortgage deals on offer, and a general feeling that rates may have now peaked, are giving some assurance and confidence to buyers.”

Matt Thompson, head of sales at Chestertons, said: “In London, many house hunters don’t expect property values to fall much further; particularly as prices haven’t decreased to the extent as initially predicted by some. As a result, buyers are currently more motivated to continue their property search. This boost in buyer confidence is further supported by last month’s announcement that interest rates remain at 5.25% for the time being.”

Tom Bill, head of UK residential research at Knight Frank, commented: “Sales volumes will improve as buyers get used to higher rates and sellers become accustomed to lower asking prices. The story of this slowdown is a double-digit fall in transactions rather than a dramatic price correction, which has been kept in check by weak supply. Unlike the pandemic or mini-Budget, there is no single reason that activity is weak.

“Higher rates, the prospect of a general election, overseas conflict and ambiguity over when the bank rate will peak are all sapping sentiment. We expect prices and sales volumes to bottom out next year as the economic backdrop stabilises.”

Adam Feather, managing director of Robert Anthony Estate Agents, said: “Activity levels continue to look subdued compared with recent years, and the housing market will slow further in the run-up to Christmas, and that is  why it is good to see serious vendors being realistic with their expectations when listing their property for sale.”

“The Bank of England’s decision to keep interest rates on hold again this month, once again raises the prospect that a peak in borrowing costs has been reached as lenders start cutting rates on mortgage deals.

“With the base rate now likely to be at or around its peak, we are seeing fixed rate mortgage deals ease back from recent highs,” Kinnaird said.

“But with mortgage rates liekley to remain high compared with recent years, buyer demand will remain constrained, putting downward pressure on house prices into next year.”

Ian Preston, managing director at Preston Baker, said: “The market is resilient and more in favour of buyers compared to the past two years.  Pricing right is the most important tool for potential sellers at the moment.  We have seen several sellers try to test the market with an over-optimistic price to qualified buyers. However, the consequences of getting it wrong are pronounced, with the data showing that many sellers who don’t get the price right the first time end up wasting a huge amount of time and money.

“Record rents have made it difficult for would-be first-time buyers trying to save up their deposit and get onto the ladder from the rental market. Meanwhile, higher interest rates and the increased tax and legislative burdens to landlords, have led to some private landlords exiting the private rental market.  Incentives are needed to encourage more private landlords back into the market and improve supply – landlords are not the problem, more investment and properties available to rent is the solution to reducing rents.”

House prices fall as sellers forced to adopt more pricing realism to attract a buyer