The average asking price for a UK home has dropped by almost £7,000 this month as sellers became more competitive as they fought to find a buyer for their properties.
With prices expected to fall further in 2024, the property portal Rightmove has reported that the average new seller asking price fell by 1.9% month-on-month to £355,177. That is a drop of £6,966 compared with November.
Prices usually fall in December because of seasonal factors, Rightmove said, but this month’s drop is bigger than the average decrease of 1.5% over the past 20 years.
On an annual basis, Rightmove reported that new seller average asking prices are just 1.1% below a year ago, defying expectations of a steeper decline in prices during 2023.
“High mortgage rates, which have added to already-stretched buyer affordability, have been a challenge throughout 2023 and this is likely to carry into next year,” said Tim Bannister, Rightmove’s director of property science innovation.
“However for now there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much better than predicted resilience this year,.”
Rightmove predicted that asking prices will drop nationally by an average of 1% in 2024, even though mortgage rates have fallen back in recent weeks.
The trade body UK Finance has predicted that mortgage lending will fall in 2014.
UK Finance expects lending for house purchases to fall to £120bn next year, from £130bn in 2023, while the number of mortgages in arrears and home repossessions are expected to rise next year.
Mortgage arrears are forecast to rise from 105,600 cases by the end of 2023 to 128,800 cases by the end of 2024.
“The challenging environment has also pushed more households into mortgage arrears,” said James Tatch, the head of analytics at UK Finance.
“However, the rigorous affordability tests in place since 2014 are now working to ensure that the vast majority of customers can still afford their mortgage payments even with the increased pressure on their finances. Although we forecast more customers will encounter arrears next year, we expect numbers to peak well below levels seen previously.”
