The total number of homes available for sale in the UK has reached its highest level for this time of year since 2014, constraining price growth as sellers contend with elevated mortgage rates, according to Rightmove’s latest market data.
The property portal’s House Price Index shows average asking prices fell in almost five regions last month, with the typical price of new listings remaining broadly flat at £371,015, representing a 1% monthly increase but a 0.1% annual decline.
Regional variations
Northern regions experienced the most significant price reductions on a monthly basis. The North East recorded the largest drop at 2% to £195,977, while Scotland saw average asking prices fall 1.9% to £203,415. The North West declined 0.6% to £273,222, Wales dropped 0.3% to £267,735, and the South West fell 0.6% to £376,189.
London diverged from the national trend with a 2.5% monthly increase in average asking prices, partially recovering from a 6.0% summer decline. However, prices in the capital remain 1.7% below year-ago levels, and Rightmove indicated that wider market indicators do not suggest a broader recovery is underway.
Market activity indicators
Sales agreed are down 8% compared to the same period last year, whilst new buyer enquiries to agents have fallen 9% year-on-year. Conversely, new property listings have increased by 3%, contributing to the elevated inventory levels.
Average mortgage rates for two-year fixed products have risen from 5.29% to 5.55%, adding pressure to buyer budgets. Rightmove suggests some potential buyers may be awaiting details of the Your First Home scheme expected in the upcoming Budget.
Top-of-the-ladder properties showed the strongest monthly performance with a 0.8% increase to £678,431, whilst first-time buyer properties rose 0.2% to £225,627. Second-stepper properties increased 0.1% to £345,170.
Colleen Babcock, Rightmove’s property expert, stated: “The rapid rise in mortgage rates is really beginning to hit buyers’ budgets. We’re now seeing mortgage rate rises feed through to seller pricing in many of the cheaper parts of Britain, where prices had been more resilient this year.”
Jeremy Leaf, a north London estate agent and former RICS residential chairman, noted that the combination of expected mortgage rate increases and Budget uncertainties is affecting market confidence. He emphasised that in the current environment, only sellers pricing competitively from the outset are achieving sales.
Nathan Emerson, Chief Executive of Propertymark, acknowledged the challenges facing the market, noting that whilst inflation has tracked downwards, it has not reached the Bank of England’s 2% target, keeping the base rate elevated and influencing mortgage availability. The current market conditions have prompted estate agents to adapt their strategies, with many reconsidering their approach to pricing and marketing.
Market outlook
Industry observers indicate that underlying demand remains present, with many prospective buyers waiting for more favourable conditions before proceeding. Market performance over the coming months will likely depend on the trajectory of inflation, interest rates, and mortgage affordability, alongside any policy announcements in the Budget.
The elevated supply levels combined with subdued buyer activity and rising borrowing costs have created a price-sensitive environment where competitive pricing has become essential for sellers seeking to complete transactions. Estate agencies are adjusting their operational approaches to navigate the challenging conditions, focusing on efficient processes and realistic price expectations to maintain transaction volumes.
