A Housing Price Update

Many home-movers tend to put off their moving plans until after the summer holidays. This coincides with the masses being able to travel, with the added bonus of relaxed restrictions that were put in place during the height of the pandemic.

How does this affect house prices? As there are fewer properties being put on the market and fewer people looking to move, there is a tendency for a seasonal drop in prices around this time of year. August 2022 follows trend and sees house prices fall for the first time this year.

According to Rightmove the average asking price of a property in Britain has fallen by almost £5,000 which is a drop of 1.3%. This is on par with the average August drop over the past 10 years. Whilst many may assume this is a result of changes to the cost of living, it is likely attributed the pattern to seasonal trends and the market returning to normal activity after the last two years.

The Christmas period also has an impact on the way sellers price their homes. It currently takes around 136 days, or 4.5 months to complete a sale. Sellers looking to celebrate this year’s festive season in their next home will be keen to find a buyer first, meaning some homes are priced competitively.

Is there a correlation between rising interest rates and house prices?

In light of the sixth consecutive rise to 1.75%, it is understandable that many prospective buyers will keeping this in mind. It is possible that the effects of the rises will gradually filter throughout the year, but they are currently not having a significant impact on the volume of people looking to move.

The discrepancy between supply and demand of movers and available properties is currently the biggest factor influencing asking prices, regardless of seasonal trends.

Will prices continue to fall?

Buyer demand has started to ease in comparison to the influx seen in 2021. The autumn months are typically a busy period within the industry, with potential price rises to follow as people look to move before the new year. Prices may then self-regulate heading in to December and the festive season.

You can find out the average asking price in your region by checking the August House Price Index report.