Biggest fall in asking prices on property for four years

ASKING prices on homes have fallen by an average of nearly £8,000 this month as high mortgage rates force sellers to slash their expectations, data shows.

The average price in the past month fell by 2.1pc, according to Rightmove. It was the largest monthly drop recorded by the property website in four years and the second monthly drop in a row, after a 1.1pc fall in November.

The average asking price of a property coming to market now stands at £359,137, down £7,860 on a month earlier. Prices fell most in the South West where the average was down by £12,680.

Across the market, asking prices were still 5.6pc higher than a year ago, but the annual growth rate had slowed significantly from 7.2pc in November.

Tim Bannister, of Rightmove, said: “It’s an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October.”

Buyers have seen budgets drastically reduced after mortgage rates rocketed this autumn. Rates on fixed-rate deals have declined slowly but steadily from their peak in October, after Jeremy Hunt was appointed Chancellor and scrapped the bulk of the Liz Truss minibudget, but they are still nearly triple what they were a year ago.

The average number of days for a property to find a buyer climbed for the sixth month in a row to 45, Rightmove said, up from 32 in June.

There are signs that the decline since October is starting to coax buyers back, however. Demand in the two weeks to Dec 3 was up 4pc on the same period in 2019. Separate figures from Hamptons show buy-to-let investors are swooping to snap up bargains as buyer demand disappears.

Between January and November, the share of offers made by buy-to-let investors on properties that had no other bids more than doubled from 14pc to 37pc, the estate agents found.

Aneisha Beveridge, of Hamptons, said: “Rising rents are tempting landlords to dip a toe back into the slowing sales market to try to pick up deals they couldn’t have got six months ago.”