Property Asking Prices Fell By 1.9% In December Vs November

Property Asking Prices Fell By 1.9% In December Vs November
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12 December 2023 – Rightmove’s latest House Price Index suggests that property asking prices fell by 1.9% this month compared to last month, contradicting figures by other reports.

Rightmove has released their latest House Price Index for the month of December. Surprisingly, the data shows that house prices have fallen by 1.9% in December compared to the previous month.

Year-on-year, these new figures indicate that house prices are now 1.1% lower than they were a year ago. This puts the average asking price in the UK at £355,177.

With this fall in asking price, Rightmove‘s data contradicts figures by other reports, such as Nationwide and Halifax. These contradictory figures stem from the data available to each company.

While the lenders only look at the properties that were bought using their mortgages, Rightmove uses the data from their portal. This means that the property portal has a greater data set available.

Transition To A Buyer’s Market

While property asking prices fell by more than is normal for this time of year, Rightmove doesn’t believe that this is a sign of the market crashing. On the contrary, the property portal sees it as a sign that the market is stabilising.

The 1.1% drop in house prices in December compared to last year combined with the number of transactions falling by 13% in comparison with last year, indicates this.

Sellers are more likely to price their property competitively now, to increase their chances to sell their home quickly. This shows that they have accepted that the market has transitioned from a seller’s market during the frenzy of the past two years to a buyer’s market this year.

Even though on a monthly basis property asking prices fell everywhere in the UK, yearly changes differ. According to Rightmove’s data, in seven of the 11 areas house prices have actually risen compared to last year.

In the North West of England, house prices are now 1.5% higher than they were a year ago. In contrast, in the Sout East of England, house prices have fallen by 3.7% compared to the same time last year.

Activity In Second-Stepper Market Picks Up

The uncertainty over affordability and where mortgage rates will go has impacted hugely on the second-stepper market. Those buyers are likely to upsize and will therefore have a bigger mortgage.

When the ill-fated mini-budget caused mortgage rates to rise sharply, buyers in this group put their plans on hold to wait and see what will happen with mortgage rates.

According to Rightmove’s data, there are signs that these home movers are coming back to the market. Activity in this sector of the market has risen by 9% compared to this time last year, when the impact of the mini-budget was the biggest.

Overall, market activity has increased by 6% compared to last year, showing that confidence in the market is improving.

The property portal put this increase in activity down to the mortgage market starting to stabilise. With experts believing that interest rates have peaked and mortgage rates have fallen in the 19 consecutive weeks, affordability is improving, even if it’s still stretched.

Both two-year and five-year average fixed mortgage rates are now below 6%, according to Moneyfacts. The average rate for a two-year fixed mortgage currently stands at 5.99%, a far cry from its peak in July of 6.86%.

The five-year fixed rate average stands at 5.6%. However, buyers who are willing to shop around will find cheaper deals. With the best rates for a two-year mortgage at a rate of under 5% and for five years under 4.5%.

While the trend is clearly downwards, borrowing costs are still significantly higher than in previous years. And experts don’t believe that they will fall to levels we have seen before the pandemic.

Our Opinion

The fact that property asking prices fell by more this December than the 20-year average, should not unduly concern the market, in our opinion. We have said it before, and we will say it again: property prices have risen too fast and too sharply in the past two years.

The level at which prices were after these increases is just not sustainable. Many first-time buyers struggled to save for a deposit before and the price rises have just made it even harder. The increase in borrowing costs just ads to the problem.

And the property market needs first-time buyers, because they are at the bottom of the chain. Second-steppers can only move if they find a buyer for their home first.

So a rebalancing of the market, which is what seems to happen now, is vital for a sustainable property market. After all, if buyers can’t afford the properties on the market, then they won’t buy them. This means a further fall in prices over the next year shouldn’t be feared.

On the contrary, it’s what has to happen if we want the property market to stay sustainable.


  • News Desk

    Our news desk team includes a qualified architect, a freelance journalist, and a fanatical property expert who has over 12 years experience in the industry.

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