House prices dip slightly in June amid rising mortgage costs, according to Rightmove
Property prices in the UK have marginally fallen this month, with sellers adjusting their price expectations in response to rising mortgage costs and the Bank of England’s recent rate increases.
The average property price on the market has dipped by 0.2% (£905), with Rightmove reporting an average selling price of £371,907.
In Wales, the average selling price in June was £260,683, down 1.3%.
According to data from Rightmove, the impact of the recent Base Rate hikes aimed at mitigating stubborn inflation rates is starting to be felt in the housing market.
Despite the promising first half of the year, the number of sales agreed upon in June is 12% lower than in 2019. However, buyer demand remains robust, at 3% higher than the same time in 2019, due to a shortage of available property listings.
Rightmove’s Director of Property Science, Tim Bannister, stated: “The interest-rate brakes applied more strongly to slow the economy are now beginning to bite in the housing market. However, buyer demand remains resilient, buoyed by a shortage of quality property for sale and ongoing housing needs.”
Sales in the mid-market second-stepper sector and the top-of-the-ladder sector have been most impacted, with numbers 14% behind 2019’s level. Conversely, the smaller home market, typically targeted by first-time buyers, has shown more resistance, with sales figures only 9% below the 2019 level.
The resilience in the smaller home market is attributed to the determination of first-time buyers to navigate the unsettled mortgage market, coupled with some individuals opting for early retirement and downsizing.
Despite a decrease in sales, the number of properties available for sale is 12% lower than in 2019. Rightmove research emphasises the hazards of initial over-pricing, with such properties being 10% less likely to find a buyer than those priced correctly at the outset.
The latest data from Rightmove’s mortgage tracker shows the average rate for a five-year fixed, 85% Loan-To-Value mortgage now sits at 5.69%, a 0.49% increase compared to last month, but still below October’s 5.89%.
Amid these market fluctuations, sellers who price their properties correctly from the beginning have a much better chance of attracting motivated buyers. As the market reacts to these developments, the resilience of buyer demand continues to be a silver lining in the UK property market.
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