Prices Drop
The average price tag for a home in the UK has fallen by nearly £7,000 this month, according to a report by Rightmove. The drop of 1.9% brings the average house price down to £355,177, which is higher than the 20-year average for the Christmas period.
Lower Mortgage Rates
Last week, mortgage rates on an average two-year fixed deal fell below six per cent for the first time since mid-June. This decrease in rates could be contributing to the decline in house prices.
Market Predictions
Rightmove predicts another one per cent dip in house prices next year. The property website attributes the decrease in prices to sellers who are looking to "price competitively" in a buyers' market.
Expert Insights
Tim Bannister, Rightmove's director of property science, stated that the fall in prices beyond the usual seasonal trends suggests that new sellers are heeding the advice of agents to price competitively. He also mentioned that high mortgage rates have been a challenge for buyer affordability in 2023 and are likely to continue into next year. However, Bannister noted that there is more calm and certainty heading into 2024, and the market has shown better resilience than predicted this year.
Potential for Market Activity
With mortgage rates becoming more settled and on a slow downward trend, potential buyers who have been waiting for calmer market conditions may decide to act in the early part of next year. Rightmove expects a post-Christmas upturn in traffic, with early-bird buyers starting their property search on Boxing Day.
