The average price of property coming to the market for sale rose by 0.3% this month (+£1,199) to £371,958 – a much lower monthly increase in new seller asking prices than is typical at this time of year, latest data from Rightmove reveals.
The muted Autumn price bounce comes as buyer choice increases to a level not seen for ten years, putting downwards pressure on price growth.
With a greater choice of properties to consider, buyers are making use of their increased negotiating power, helping to keep price rises subdued.
However, market activity remains strong despite some uncertainty created by the upcoming Autumn Budget.
SUBDUED PRICE GROWTH
Tim Bannister, Rightmove’s Director of Property Science, says: “This month’s subdued price growth comes as buyer choice soars to a level not seen since 2014.
“With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched.”
And he adds: “Some sellers appear to be acting on this caution, contributing to limited price growth and better buyer affordability.
“This is helping to keep the number of sales being agreed consistently and strongly ahead of the quieter market of this time last year.
“We’re not seeing activity slow down, but some estate agents report that some movers are now waiting for budget clarity and anticipated cheaper mortgage rates later this year. However, others state that movers are largely just getting on with plans.”
The latest snapshot of sales activity shows that the number of sales being agreed is now 29% ahead of the same period last year meaning sales activity has not only bounced back from the low of last year but has continued on an upward trajectory.
BUDGET CLOUDS
Bannister says: “Despite a budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025.
“Market activity remains strong, despite affordability pressures on movers. Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the Summer.
“Affordability is still the biggest barrier facing many movers, with mortgage rates still high, so if the expected two cuts come to fruition it could be the boost that many buyers-in-waiting need. 2025 could see the return of the previously priced out buyer.”
SOME UNCERTAINTY
Chris Rowson, Managing Director of Sharman Quinney in Peterborough, says: “Activity has been strong; we’ve seen a surge of new instructions in September and is one of our busiest months for new sellers in the last decade.
“We’ve also seen a good jump in new potential buyers, as well as agreed sales in the area, so it’s been busy.
“The Bank Rate cut and lower mortgage rates definitely played their part in helping more people to come to market.
“There’s always some uncertainty surrounding the Budget, but we’re not seeing any buyer hesitation due to it.
“Despite some mortgage interest rates trickling upwards, the changes are small and not of major concern right now.”
EXCEPTIONAL ACTIVITY
Joel Baseley, Founder and Director of Rampton Baseley in London, adds: “We’ve seen one of the best years for number of transactions in our 18-year history and while activity has been exceptional, price growth has been muted.
“This could be down to the ‘new normal’ of higher interest rates but also a particularly steep increase in values post-pandemic which will need more time to level off.
“Moving into the new year we were expecting a pre-election pause, but did not expect a second hiatus due to the new government’s much anticipated first budget.
“However, we’re hoping for a good end to the year once this pause button is released.”
APPROVALS STRENGTHENING
Marc von Grundherr, Director of Benham and Reeves in London, says: “Mortgage approval levels have been strengthening for much of this year and we’re now seeing this increase in buyer demand start to filter through to actual sales, with monthly transactions being the strongest since 2022.
“This improving market momentum has also helped to tempt many sellers back into the market who had previously put their plans to move on pause.
“Of course, there will always be a segment of both buyers and sellers who will sit tight in the hopes of some form of property market boost via the upcoming Autumn Budget.
“However, we’re not seeing this at ground level so much, largely due to the fact that very little has been leaked with regard to the sales sector.”
DRIVING SEAT
Nathan Emerson, Chief Executive of Propertymark, says: “Many serious buyers seem to be in the driving seat when it comes to negotiating on their next home move due to the vast choice of properties on the market.
“Furthermore, with the Bank of England’s next announcement on interest rates looming, some buyers will be cautious with their current budgets or will be waiting in the wings to see what its decision will mean for the market before moving.
“As it stands, we are seeing really competitive mortgage deals enter the market, enabling buyers to find an affordable middle ground to purchase their ideal home.
“However, we now hope the Bank of England cuts interest rates further as soon as they’re able to in order to further stimulate the market and enable people to move within or step onto the housing ladder for the first time.”
CHANGING MARKET
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “There’s no question the market has changed considerably since last summer.
“Interest rate and political uncertainty has been replaced by steadily falling mortgage costs and more stable government. As a result, buyer and seller sentiment, which is of course is so crucial to activity, has improved.
“However, over-supply of stock in some areas and price ranges, as well as worries about the contents of the forthcoming Autumn Statement, has increased caution, deferred decision-making and kept prices in check.
“Looking forward, we expect there will be a modest bounce back if the Chancellor’s announcements prove to be less damaging than many fear.”
MORTGAGE BOOST
Myles Moloney, Area Sales Manager at Chase Buchanan, says: “At the beginning of October we saw continued buyer confidence which was boosted by favourable mortgage rates and a greater number of properties being put up for sale.
“As we are nearing the Autumn Budget, however, house hunters and sellers have grown more cautious.
“We predict market activity to pick-up after the Budget, once buyers and sellers feel that a more defined picture of the political and economic environment has been established.”
GROWTH SLOWDOWN
Tomer Aboody, director of specialist lender MT Finance, adds: “As a greater volume of properties come up for sale, this is creating a buyers’ market with those who can afford to buy having increased choice, enabling them to negotiate a better price. This, in turn, is leading to a slowdown in growth in asking prices.
“Even with the uncertainty around the Budget lingering in the background, many buyers are still choosing to take the plunge, not knowing whether whatever the Chancellor announces could end up reducing their ability to buy if the markets react badly.
“Further rate cuts are expected before the end of the year though, so even with a painful Budget, we could see a strong end to 2024.”
