UK Average house price drops for first time in 2021 but Rightmove predicts autumn ‘bounce’

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With stamp duty savings largely behind us, Rightmove has seen prices drop in the upper-end four-bedroom-plus sector. Prices have dropped by £4,699 (-0.8 percent) in the month, with buyers no longer making larger stamp duty savings after the threshold was reduced at the end of June. However, Rightmove also recorded record highs in the price of property coming to market in the mass-market sectors which includes first-time buyer properties.

Property in this sector has increased by £1,328 (+0.6 percent) in August, with second-stepper properties, also up by £975 (+0.3 percent) in the month.

Lower-priced sectors are likely to be less affected by the reduction of the stamp duty threshold.

Buyer demand is still strong across the market with Rightmove predicting an autumn “bounce” could be on the cards.

Property demand is up 56 percent in August compared to the same period in 2019.

The number of sales agreed is also up by nine percent compared to the same period in 2019.

Tim Bannister, Rightmove’s Director of Property Data said sellers dropping asking prices can “ring economy alarm bells”, however, it’s important to look at the new figures in context.

Mr Bannister explained that the holiday season means sellers have “traditionally” tempted distracted buyers with lower prices.

Although, this may not be the case with many buyers choosing to holiday closer to home.

The Rightmove property expert continued: “Indeed, our analysis shows that average prices have only fallen in the upper-end sector, which is usually more affected by seasonal factors such as the summer holidays and has also seen the greatest withdrawal of stamp duty incentives.

“The mass-market of properties that cater for first-time buyers and second-steppers is still seeing high demand and upwards price pressure leading to new record high average prices in those sectors.

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“In England there remains a smaller stamp duty saving of up to £2,500, though the window to take advantage of this saving by buying now and completing by the end of September is pretty much closed.”

Housing stock still remains at a record low with strong buyer demand eclipsing any new supply.

Rightmove is urging homeowners who are yet to come to market and address their housing needs to “act soon” if they want a quick sale at a good price before Christmas.

The UK’s largest property site also found that the likelihood of a seller finding a buyer remains at, or close to, an all-time high.

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Currently, the average time for a newly listed property to be market STC is the quickest ever at just 36 days.

The booming property market does mean that buyers need to be in a proceedable position to be attractive to sellers.

Many sellers are even looking to have a buyer lined up STC before they find their own property.

Mr Bannister explained further: “Sell before you buy is a successful tactic in fast moving markets, especially the current one where any new listings popular in both specification and location are selling in days rather than weeks.

“Your own buyer will have to show a degree of patience while you wait for the right property to come to market, though the pedestrian speed of the normal legal process often creates the opportunity to play catch-up later if it takes a few weeks to find the right property.

“Some sellers are even completing their sale and going into intermediate rented accommodation and then buying, though this takes extra resolve and time.”

Nick Barnes, Head of Research at Chestertons, said August tends to be a “quieter” month.

He continued: “But, in line with Rightmove’s analysis, buyer interest has remained strong and sales in the first half of August were seven percent higher than in the corresponding period last year.

“Chestertons also noted a 45 percent reduction in the number of properties coming onto the London market, which inevitably creates competitive market conditions.

“As a result, we have seen a 49 percent decrease in the number of sellers willing to drop their asking prices during the first half of August 2021 compared to this time last year.”

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