Key takeaways from August’s House Price Index:
- The average asking price of a home has dropped by 1.3% this month, to £368,740
- This is the third monthly price fall in a row, but August’s drop is in line with usual seasonal trends
- Buyer choice teamed with price falls has led to the busiest July for sales agreed since 2020
- The average time to sell for a reduced property is 99 days, while those that don’t need a reduction sell in just 32 days on average – showing pricing right first time is key to finding a buyer
After the bigger-than-usual price drops we saw in June and July, August has brought a more typical seasonal fall of 1.3% (-£4,969). And these price falls have resulted in a jump in buyer activity: it’s been the busiest July for agreed sales since 2020’s post-lockdown market, and the number of sales agreed is 8% higher than at this time last year.
With the number of homes for sale currently 10% higher than a year ago, sellers are having to work harder to capture buyers’ attention. Those who are pricing realistically are selling their homes much more quickly on average, even with many people distracted by the summer holidays.
Our property expert, Colleen Babcock, says: “Astute buyers are now benefitting from new seller asking prices which are on average an enticing £10,000 cheaper than three months ago. Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale.”
Sales agreed are now running 8% higher than this time last year, indicating there are plenty of motivated buyers out there when they find the right property at the right price.
We’re also starting to see a two-speed market emerge. While the average time to find a buyer is 62 days overall, there’s a big difference depending on whether sellers get their pricing right from the start. Properties that don’t need a price reduction find a buyer in an average of just 32 days, but for homes needing a reduction to the asking price, that time more than triples, to 99 days. And right now, 34% of homes are seeing price reductions – the highest level at this time of year since 2023.
Colleen adds: “Our data shows that for a successful sale it’s better to get the price right in the first place, but if a seller does need to reduce the price it’s better to act fast rather than waiting too long.”
What’s happening across the country?
The high level of choice is keeping annual price growth modest – asking prices are now just 0.3% higher than they were a year ago.
Regionally, we’re seeing some interesting patterns emerge. London has seen the biggest regional drop at -2.6%, particularly in areas like Westminster and Kensington & Chelsea, where buyers at the top end of the market are being impacted by stamp duty changes. Meanwhile, Scotland has bucked the trend with a 1.0% monthly fall, but still shows strong annual growth of 2.9%.
The recent third Bank Rate cut of the year is helping too. Our mortgage rates tracker shows the average two-year fixed rate is now 4.49%, compared with 5.17% at this time last year. For someone buying a home at the average house price with a 20% deposit and spreading payments over 30 years, that’s a saving of £117 per month compared to this time last year.
What do the local experts think?
Steve Beercock, Executive Director at Beercocks in Yorkshire & The Humber, says: “August has started with some real momentum. We have already seen a surge of sales agreed in just the first week which is a very positive sign. Getting the price right from the outset in the current market is crucial, to minimise the risk of needing to cut the price later. Looking ahead, I expect September to be very strong. The recent drop in the Bank of England base rate is already stimulating activity. With that combination of lower borrowing costs and motivated sellers who are pricing sensibly, the autumn market is shaping up to be busy and competitive.”
Colleen adds: “Strong summer property sales as well as a stable level of new buyer demand bode well for the next couple of months. We usually see a busier autumn compared to the summer as the new school year starts and more focus returns to moving home.”
Ready to make your move?
Whether you’re thinking about selling and want to price competitively from the start, or you’re a buyer looking to take advantage of the current choice available, we’re here to guide you. Whether it’s starting your property search, calculating your budget, or nailing down your plan to move in, we have home-moving tools to help you every step of the way.
The header image for this article was provided by Hudson Moody, York City Centre.
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