UK house price drop part of seasonal trend, says Rightmove

Prices have fallen for the first time this year.

The average UK property price has fallen for the first time this year, according to the latest Rightmove House Price Index. However, the real estate company has attributed this to a seasonal trend and does not reflect broader economic factors.

“A drop in asking prices is to be expected this month as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be homemovers become distracted by the summer holidays,” said Tim Bannister, Director at Rightmove.

The latest figures have priced the average home in the UK at £365,173 in August, almost £5,000 less than what was recorded the previous month.

Property prices normally experience a slight drop at this time of year as sellers attempt to speed up the sale of their property before Christmas.  

To achieve this, sellers would need to beat the average time of four and a half months between accepting an offer and completing the sale, said Bannister.

“Nevertheless, we’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end the year at around 7% annual growth, even with the wider economic uncertainty,” he added.

Research from Rightmove also found that the latest base rate hike of 50 basis points is putting further pressure on buyer affordability.

In particular, the average monthly mortgage payments for first-time buyers putting down a 10% deposit has exceeded £1,000 a month. Currently, this figure is over a quarter more expensive than at the beginning of the year.

Moneyfacts data supports this trend, putting the average two year fixed-mortgage rate that can finance up to 95% of a property at 4.22% for August. This figure is 0.26 percentage points higher than the average last month, and almost a full percent more than what was recorded in August 2019.

Likewise, the average five year fixed-mortgage rate that can finance up to 95% sits at 4.17% for August. This is 0.20 percentage points higher than last month and over half a percent than what was recorded two years prior.

The number of residential mortgage products on the market is also diminishing, as covered in our Moneyfacts UK Mortgage Trends Treasury Report.

This trend is also identifiable for first-time borrowers, who can provide at least a 5% deposit. 

For August the total product count for residential mortgage products at a loan-to-value (LTV) ratio of 95% stood at 301, just 26 fewer than what was recorded one year previously.

“The support and advice of a broker in finding the best option for an individual’s circumstance and in helping to assess their eligibility has likely never been more vital as the mortgage landscape remains extremely changeable,” said Eleanor Williams, Finance Expert at Moneyfacts, in an article for our site last week.