Sunday, February 25, 2024

Property asking prices drop 1.9% in December

property finance

Prices were 1.1% lower than a year earlier, data from Rightmove showed

Average asking prices for newly listed houses and apartments in the UK dropped by 1.9% in December, more than the historic average drop for the final month of the year, according to figures from property website Rightmove on Monday.

Prices were 1.1% lower than a year earlier, the data showed.

The weakness contrasts with data from mortgage lenders Halifax and Nationwide over the past two weeks, which showed modest monthly price increases, indicating that the past year’s drop in house prices had bottomed out.

Further price drops beyond the usual seasonal trends that we’d expect at this time of year indicate that some new sellers are continuing to act on the advice of agents to price competitively, according to Rightmove director Tim Bannister.

Asking prices are likely to decline another 1.0% in 2024, Rightmove said, with affordability still stretched in spite of signs that mortgage rates are now past their peak.

Rightmove data is not seasonally adjusted, and on average over the past 20 years asking prices have dropped 1.5% in December. The December period covers new property advertised between November 5 and December 2.

Prices increased by more than a quarter between the start of the pandemic in February 2020 and September 2022, as per official data, boosted by record-low interest rates and a higher demand for living space during lockdown.

A jump in official interest rates from 0.1% in December 2021 to a 15-year high of 5.25% this August, along with high inflation squeezing households’ disposable income, has led to a small drop in house prices over the past year.

Rightmove said the number of sales agreed so far this year was 13% lower than over the same period last year, adding that this was less of a drop than it had expected, given the very high number of house purchases in early 2022.

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