August 2023 Market Commentary

The August 2023 House Price Index has shown signs of improving affordability as the average asking price of new properties coming to the market fell by 1.9% across the UK (1.8% in the local South East market). A price drop in August is usually expected due to the Summer slowdown of the school holidays, with an average expected drop of 0.9%. The impact of affordability and interest rates is evident by the larger than usual summer price drop.

When breaking this price drop down into market sectors, we can see that the largest impact lies with larger properties sitting in the ‘top of the ladder’ sector with a 3.4% decrease in average asking price this month. Smaller properties for first-time-buyers or second-steppers have been affected much less, with a price drop of 0.9% and 0.8% respectively, which is much closer to that expected at this time of year.

The price drop we are seeing means that sellers are taking on advice from their agents and pricing competitively with the market in order to compete with the summer holidays, cost of living crisis as well as the highest Bank of England Base Rate since 2008. However, the price drop we are seeing this summer must be held in comparison to the overall growth of the market with significant increases over the last four years, with the average asking price up 19% than this time in 2019.

With average earnings going up in addition to the decrease of mortgage rates, together with the 1.9% decrease in asking price, there is a promising trend of improvement to buyer affordability. In just three weeks the average five-year fixed mortgage rate has fallen, down to an average rate of 5.81% (from 6.08%). This trend is promising and brings hope to buyers, especially those requiring mortgages.

In this market, it is imperative to price property correctly from the outset. Data from Rightmove illustrates that property which is priced right at the initial marketing release takes half as long to sell than property which requires a price reduction down the line.

For those currently looking to upsize, the falling market gives an opportunity to make the most of your money. The percentage drop in prices is a lesser margin on your current smaller property than the larger more expensive upsize you are looking to buy. This means that you are able to capitalise on the falling market and upsize for less.

The key point to take away from this article however, is not a statistic. The market is a little unpredictable but is showing positive signs for improving affordability for buyers, this can only mean good things for the property market. But, in an unpredictable market one thing is for certain – a good agent goes a long way. One willing to put in the legwork and be proactive.

If you’re thinking about selling, getting expert advice on marketing strategy and pricing is a must. We’re here to help with a team of experienced experts on hand, so give us a call to discuss your plans. Even if you’re just curious to find out how the current market changes have impacted the value of your property, we’re just a phone call away.

*Data sourced from publicly available resources including UK Government and Rightmove