Home sellers are being forced to reduce their property asking prices as affordability pressures persist nationwide.
Based on new data from property platform Rightmove, the average time for a seller to find a buyer has jumped from 45 days this time last year to 66 days now. Sellers who have been competitive on price have been finding buyers more quickly.
Subsequently, the property experts predict average new seller asking prices to be one percent lower nationally by the end of 2024. This projection comes as the market undergoes a shift towards more typical levels of activity after the intense post-pandemic period.
According to its latest House Price Index, new seller asking prices dropped by 1.7 percent (-£6,088) to £362,143 in November. While asking prices usually drop over the festive season, Rightmove said this year’s November drop is the largest in five years. This indicates new sellers are also increasingly adopting more realistic price expectations from the outset of marketing to tempt potential buyers to act.
Rightmove’s Tim Bannister commented: “This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties.
“However, it has been a challenging change in mindset for some sellers to transition from the frenzied market of the previous few years.
“The level of sales being agreed is 10 percent lower than at this time in the more normal market of 2019, so sellers will need to price even more competitively next year to make sure that they secure a buyer. We predict a modest average fall of one percent in new seller asking prices next year. This will be felt more keenly in some areas of Great Britain than others.”
Rightmove projects that motivated sellers are likely to have to price more competitively to secure a buyer in 2024, and agents will need to work even harder to build chains, especially at the bottom end where first-time buyer affordability will remain stretched.
It also predicts mortgage rates to settle but remain elevated, tempering some buyers’ budgets, especially in the lower and middle market sectors.
Rightmove’s forecast is based on its whole of market data and house price predictive model using millions of supply, demand and pricing data, along with insights from estate agents and a panel of Rightmove experts.
A year ago, Rightmove predicted average new seller asking prices would drop by two percent in 2023, and they are currently 1.3 percent lower year-on-year.
Some monthly price falls have been greater than the usual seasonal trends this year. Mr Bannister said: “The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand.
“In areas with more discretionary sellers and fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.”
The level of price reductions increased during 2023, with 39 percent of properties now seeing a price reduction during marketing. This is an increase from 29 percent last year and 34 percent in 2019.
New sellers will need to compete with their cut-price neighbours and work with their agent to start their marketing with a competitive price, rather than starting too high and needing to reduce later.
Rightmove research shows that pricing right at the outset maximises the initial impact among local buyers and gives new sellers a much greater likelihood of a successful sale.
Mr Bannister said: “In areas where sellers are struggling to attract affordability-stretched buyers or needing to sell quickly due to a change of circumstance, new job opportunity, or strong desire for a lifestyle change, we are likely to see even more competitive pricing.
“An average drop of one percent in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.”
However, Mr Bannister noted: “The better-than-anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing and marketing strategy.
“This underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year.”
