Average new seller asking prices increase by 0.5% in October, the lowest at this time of year since 2008.
The asking prices increased to £368,231 which is well below the historic norm in October of 1.4%, according to Rightmove House Price Index.
However, despite this marginal increase, buyer activity levels remain significantly lower than during the post-pandemic market frenzy.
And the number of sales being agreed is now 17% below this time last year.
The proportion of homes finding a buyer and being marked Sold Subject To Contract dropped from an average of eight in 10 at the height of the frenzy, to six in 10 now, the Rightmove data showed.
It also showed that buyers are still active for the right property at the right price.
Estate agents have advised that sellers need to capture a buyer’s attention with a competitive price from the first day of marketing.
They advised that starting too high and reducing later seriously damages the chances of a sale, though many sellers appear to be struggling to adjust their pricing tactics to help them to sell in this more challenging market.
And the number of buyers enquiring about each available home for sale is still 8% higher than at the same time in pre-pandemic 2019, the Rightmove data showed.
If a property for sale receives its first buyer enquiry on the first day of marketing rather than after two weeks, then that property is 60% more likely to find a buyer and be marked Sold Subject To Contract.
Agents report that creating this immediate momentum is critical, and that the most successful sellers are those who stand out as they are pricing most competitively against similar properties for sale.
Accurately priced properties succeed in finding a buyer in less than half the time that it takes those that need a reduction, and when they do find a buyer, the sale is also 50% less likely to fall through, according to the Rightmove data.
This highlights the importance for serious sellers of working with a local estate agent to get the price right first time rather than testing a higher price and mistakenly thinking that they can just reduce later without damaging their chances of a sale, the data showed.
Rightmove’s Director of Property Science Tim Bannister said: “In a market that agents describe as the most price-sensitive ever, buyers are likely to be on the look-out for homes that they feel represent excellent value, and to attract one of these motivated buyers, sellers need to price right first time.
“If similar nearby properties for sale appear overpriced, serious sellers have an opportunity to stand out from the crowd with a more competitive price and attract immediate buyer interest that our research shows significantly increases the likelihood of finding a buyer.”
A more stable mortgage market is providing some home-movers with more confidence about what they are likely to be able to afford, even with rates remaining well above the ultra-low levels of recent years.
The average two-year fixed rate is below 6% for the first time since June, and average two-year and five-year mortgage rates are both now lower than at this time last year during the post-mini-Budget period.
In the last year, the average house price to earnings ratio has also decreased by close to 10%, meaning that buyer affordability, while still stretched, has improved compared to this time last year.
Meanwhile, average fixed mortgage rates continue to trend downwards and have now fallen for 11 consecutive weeks, with the average five-year fixed rate dropping from 6.08% to the current 5.43% over that period. The cheapest available rates in some Loan-To-Value (LTV) brackets are now below 5%, with rates in other LTV’s edging closer to sub-5%.
Ben Gee, founder at Hat and Home in Berkshire said some buyers “remain cautious and reticent to commit due to easing prices and increased borrowing costs”.
“Ambitious asking prices are exacerbating this and simply slowing down the speed of sale for sellers as they are being ‘pitched’ to the wrong audience until a price correction is made. Advising sellers correctly at the point of instruction to adopt a realistic approach to their marketing price will invariably get the property sold quicker at a better final price.”
