London asking prices fell 1.2 per cent year on year as the UK saw the weakest October for growth since 2008, according to new data.
The new average asking price for a London home is £687,400, according to Rightmove, which found the amount of time it is taking to secure a sale also rose to 65 days.
The selling time is lower than the January peak of 74 days, but still much higher than the 51 days it took last autumn, before the full impact of the Truss government’s disastrous mini-Budget sent inflation, interest rates and mortgage costs soaring.
In addition, house prices fell in more London boroughs than they rose in, with just 12 areas avoiding asking price falls.
The strongest year-on-year growth was in Richmond upon Thames, where asking prices increase 4.3 per cent to £946,900, followed by Southwark (up 3.9 per cent to £672,205) and Sutton (up 1.8 per cent to £549,200).
Neighbouring Merton saw the biggest annual slide in asking prices, down 6.9 per cent to £690,280. Newham (-3.9 per cent to £454,460); Croydon (-3.3 per cent to £480,820); Redbridge (-3.1 per cent to £508,160); and Camden (-2.7 per cent to £1,027,680) completed the bottom five boroughs for house price growth.
House prices in Britain
Across Britain, the average new seller asking price increased by 0.5 per cent (£1,950) month-on-month in October, to reach £368,231, Rightmove said.
Newly-advertised properties typically increase at this time of year, as the autumn selling market gets under way.
But the increase in October 2023 was the smallest average asking price rise for this time of year since 2008, and well below the average increase of 1.4 per cent recorded in October over the past 20 years, the website said.
The number of sales being agreed is 17 per cent below this time last year, it added.
Rightmove’s analysis indicates that starting too high with the asking price and reducing it later can negatively affect the chances of a sale.
Rightmove’s Tim Banniste said: “New seller asking prices have seen a rise, as they usually do at this time of year following the summer holiday season.
“While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve.”
He added: “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.”
Mr Bannister said the mortgage market is “much more stable right now compared to three months ago, giving movers a little more assurance over the rate they are likely to be offered and therefore what they are likely to be able to afford.
“Those looking to secure a new home for the new year should apply for a mortgage in principle to work out what they could afford, and listen to local estate agents about what’s happening in their local housing market.”
Sellers who price realistically or even a little modestly, often find they are met with more than one buyer who is attracted by the good-value pricing
Ben Gee, founder at Berkshire-based estate agent Hat and Home said: “With a significant proportion of instructions seeing at least one reduction prior to sale, many buyers are adopting a ‘wait and see’ approach, which is creating inertia across all price ranges.
“Premium stock in excellent condition or in the most sought-after locations continues to get strong interest quickly, but the mass market of homes needs to offer ‘good value’ whilst buyers have more property to choose from and are more price-sensitive.”
The report was released as separate research from estate and lettings agent Hamptons indicated that, across Britain, the average rent for a newly-let property was 11.7 per cent higher in September than a year earlier.
Hamptons put the average monthly rent on a newly-let property at £1,325.
Landlords have been facing their own rising costs as mortgage rates have increased.
Aneisha Beveridge, head of research at Hamptons, said: “A decade of cheap money and rising house prices encouraged many landlords to remortgage and extract cash out of their buy-to-let when remortgaging.”
She added: “Rising rates will reverse this flow of finance, pulling cash out of the economy and back into the housing market as investors look to pay down their debt instead.”
Hamptons’ index uses data from estate agents’ network Countrywide, which Hamptons is part of. It is based on thousands of homes let and managed by Countrywide each year. It is based on rents achieved rather than advertised rents.
