Average asking prices dropped by more than usual in October amid pre and post-Budget jitters, Rightmove claims.
The property website’s latest data on house prices shows average new seller asking prices dropped by 1.4% between September and October.
That is larger than the typical 0.8% drop for this time of year and has been attributed to concerns about tax rises ahead of and after the Autumn Budget.
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Rightmove’s House Price Index for October puts average prices down by £5,366 to £366,592.
Average values are still up 1.2% annually though.
Tim Bannister, director of property science for Rightmove, said there has been a lot of news to digest for home-movers over the past few weeks due to changes to mortgage rates and interest rate cuts and it appears that the market may still be chewing it over.
“We had been seeing a drop-off in buyer demand both in the lead-up to the Budget and in its immediate aftermath, as it was confirmed that there will be an increase to stamp-duty charges for most home-movers and second-home buyers, and some first-time buyers,” he says.
“However, a second bank rate cut and a boost of optimism regarding 2025 appear to have reversed this trend at least temporarily.”
The pre and post-Budget property market
It has been an interesting time to sell a property in recent months.
Asking prices were buoyed in the summer months as inflation and mortgage rates fell, giving sellers more confidence to put their homes on the market as buyer budgets increased.
But uncertainty about tax rises and changes in the property market in the build-up to the Budget appears to have slowed momentum.
Asking prices rose by less than usual in September and dropped by more than they typically do for October, according to the latest report.
Ahead of the Budget in early October, Rightmove data shows buyer demand – based on enquiries to estate agents – was 23% ahead of the same period in 2023.
This figure dropped to 18% following the Budget but has now ticked back up to 23% following the interest rate cut.
The number of sales agreed is still 26% ahead of the quieter market at this time in 2023 and supply of new listings is up 6%.
However, Rightmove does still expect the usual seasonal slow-down in home-moving activity as we get closer to Christmas.
“Zooming out of these short-term trends, the big picture of market activity remains positive when compared to the quieter market at this time last year,” adds Bannister.
“This sets us up for what we predict will be a stronger 2025 in both prices and number of homes sold, particularly if mortgage rates fall by enough to significantly improve affordability for more of the mass-market.”
What is happening with house prices?
House prices had dropped at the start of the year as high inflation and expensive mortgages dented buyer demand.
But confidence returned to the market in the middle of the year and into the summer as inflation fell, interest rates were cut and mortgage pricing dropped.
This has helped house price growth hit a two-year high, with Halifax even reporting that prices are back above their pre-pandemic peak.
The change in sentiment has prompted many analysts to revise their forecasts.
Estate agency Knight Frank had forecast a 4% decline for 2024 but is now expecting prices to rise by 3%.
Savills had last year predicted that house prices would fall by 3% this year but has since revised its forecast to annual growth of 2.5%.
Looking to 2025, Savills is forecasting a 4% rise.
Rightmove has similar thinking when it comes to asking prices.
The property website said there are signs that the latest Bank of England’s November interest rate cut is boosting buyer demand, which the property website predicts will help asking prices rise by 4% next year – its highest prediction since 2021.
New sellers will need to continue being sensible with their price expectations to attract buyers who are spoilt for choice though, the website warns.
