Asking prices see first June fall since 2017.
This month, new seller asking prices decreased by an average of £82 to £372,812, marking the first monthly decline in asking prices this year and the first decline in June since 2017, according to Rightmove statistics.
The most recent House Price Index published by the real estate website shows that prices decreased this month after rising 1.8% in May.
By the end of the year, it still anticipates an overall 2% annual decline in new seller average asking prices.
According to the report, the delayed spring bounce that occurred in May has abruptly changed into an early summer price decline. In line with the customary seasonal pattern, prices are anticipated to decline in the majority of the remaining months of the year.
It also notes that yearly price increase decreased from 1.5% in May to 1.1% this month.
According to the article, “the disorderly mortgage market is creating uncertainty among movers, with more change expected this week.”
The Monetary Policy Committee of the Bank of England is largely anticipated to increase the base rate by 25 basis points to 4.75% on Thursday, the 13th consecutive increase, in an effort to combat inflation.
The study claims that despite the “significant increases in mortgage interest rates over the last few weeks,” there has been little to no impact on sales activity and no current change in buyer demand.
It notes that the demand from buyers over the past two weeks is 6% greater than it was during the same time in 2019’s more typical market.
However, compared to May, the number of sales that have been agreed upon is 6% below that of the same period last year.
“Agents report that new sellers are sitting in two camps — those who still have overly optimistic price expectations following the buoyant pandemic market, and those who have adapted to the new conditions and are coming to market with a competitive price,” says Tim Bannister, director of property science at Rightmove.
“While it seemed a few weeks ago that we might be close to the ceiling of rate rises, this past month and sentiments have shown that there’s still a way to go,” says Tomer Aboody, director of property lender at MT Finance.
Since buyers are unsure of what will happen with mortgage rates and if they will fulfil affordability requirements whenever they come to take out a transaction, the uncertainty and rate increases have unavoidably created an uneasy scenario.
Is it now appropriate for purchasers to expect and accept interest rates that are trending at between 5% and 7%, to make the arithmetic work for their circumstances, and to be realistic about what they can afford?
The managing director of real estate at Shawbrook makes the following observation: “The housing market continues to encounter issues, with buyer confidence having an impact on prices.
“Buyers continue to be cautious as a result of the heady mixture of high interest rates and inflation.
However, seasoned investors and landlords might consider now the best time to expand their real estate holdings and take advantage of market opportunities.