Rate Rises Quash Spring Price Bounce But Activity Holds Up

• Average new seller asking prices fall by £82 (-0.0%) this month to £372,812, the first monthly drop in asking prices this year and the first drop seen in the month of June since 2017:
  • The delayed spring bounce in May has quickly turned into an earlier than usual summer price slowdown
  • Asking prices set to fall in most months for the rest of the year in line with the usual seasonal pattern, and Rightmove still predicts an overall 2% annual drop in new seller average asking prices by the end of 2023
• Despite some significant increases in mortgage interest rates over the last few weeks, Rightmove’s statistics currently show no effect on buyer demand but a slight impact on sales activity:
  • Buyer demand over the last two weeks is 6% higher than the same period in 2019’s more normal market
  • The number of sales being agreed has dropped marginally, and in the last two weeks is 6% behind the same period in 2019 compared to being 3% behind in May
• The disorderly mortgage market is creating uncertainty among movers with more change expected this week:
  • More prospective buyers are checking their latest affordability, with daily visits to Rightmove’s Mortgage in Principle service jumping by 53% since the unexpectedly high inflation figures
  • Ahead of this week’s inflation figures and Bank of England Base Rate decision, the average rate for a 5-year fixed 85% Loan-to-Value mortgage at the time of writing is 5.20%, up from 4.56% four weeks ago

Average new seller asking prices fall by £82 (-0.0%) this month to £372,812. This is the first monthly drop in new asking prices this year, and the first at this time of year since 2017. On average over the previous ten years we have seen an increase of 0.6% in asking prices at this time of year, indicating that buyer affordability constraints and more pricing realism from new sellers have brought forward the usual summer slowdown. There have been some significant increases in fixed mortgage interest rates over the last few weeks following stubbornly high inflation figures, piling pressure onto already very stretched budgets. These increases in rates and monthly mortgage payments may mean that some have to pause their plans for now. However, Rightmove’s latest snapshot of the market suggests the immediate impact on activity has been limited with most movers determined to carry on if they can still afford it.

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