UK property asking prices dip as buyers hope for interest rate cut

The average asking price of a UK property fell by 0.4% in July amid signs that some buyers are waiting for the Bank of England (BoE) to cut interest rates.

Across Britain, the typical new seller asking price fell by 0.4%, or £1,617, month-on-month in July to £373,493, down from £375,110 in June, Rightmove said.

The data suggests sellers are putting their property up for sale with lower prices to attract buyers, particularly at the top of the market where average asking prices dropped 1.3% on a monthly basis and by 1% annually to £681,096.

This is a slightly bigger drop than normal at this time of year, according to the property website. Asking prices have dropped by an average of 0.2% in July over the past two decades, due to the slower holiday season.

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Rightmove attributed this larger drop to new sellers trying to attract buyers amidst distractions from the general election, various sporting events, and the summer holiday season.

Tim Bannister, Rightmove’s director of property science, said: “Three major uncertainties hanging over the property market at the start of the year were when the first interest rate cut would be, and the timing and the result of the general election. We’ve now got the political certainty of a new government with a large majority, which we expect will help home-mover confidence.”

He also it described the potential for a cut in the BoE's interest rate as a "game-changer".

"A first Base Rate cut for over four years, together with the new political certainty, could set the scene for a positive autumn market, with improved affordability and a more confident outlook in the second half of the year.”

The figures also show that the number of sales being agreed and new sellers coming to market is higher than a year ago.

The number of sales agreed in July rose 15% year on year — when mortgage rates were approaching their peak — compared with a rise of 6% in June, with the number of new sellers coming to market up 3% year-on-year.

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And although overall buyer demand in the period remained stable, demand in the first-time buyer sector — which is particularly affordability-stretched — fell 2%.

In the North West of England, the average asking price rose by 0.8% over the past month, up 3.5% year-on-year.

Similarly, in the North East of England, average newly listed asking prices rose by 0.5% this month, up 4.6% annually.

However, in the South East of England, average asking prices dropped by 2% this month and in the South West, asking prices fell by 0.5%.

Matt Nicol, managing director at estate agent Nicol & Co in Worcestershire, said: “Valuations and instructions remain strong, backing up the historical data that shows elections have minimal market impact.”

Nathan Emerson, CEO of property professionals’ body Propertymark, said: “Any slight dip in house prices is likely to only be a temporary phase following a period of uncertainty triggered by the recent general election.”

However, Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors residential chairman, does not think house prices are rising anytime soon.

He said: “Over the past month and particularly since the election result, we have seen a rebound in confidence and activity.

“However, we are not getting carried away as the increased choice and continuing economic concerns will keep the higher price aspirations of homeowners in check.”

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