Sellers determined to ignore the elephant in the room: Rightmove

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the Rightmove house price index for June 2023, showing sellers determined to ignore the elephant in the room.

Key points from publication:

• • Asking prices fell by £82 in June, according to Rightmove.
  • The average asking price is £372,812 – up 1.1% in a year. It’s predicting a 2% fall by the end of the year.
  • In London the average asking price fell 1.6%.
  • It said buyer demand had remained level during the month, up 6% from the same period in 2019.
  • The number of sales was down 6% from the same period in 2019.

Sarah Coles says:

“Sellers are determined to ignore the elephant in the room – even though it’s pinning would-be buyers to the ground, and squeezing the life out of the market.

“On average, asking prices fell just £82 in June, despite horrible rises in mortgage rates.

“At the end of last week, the average two-year fixed rate mortgage was just shy of 6%, and there’s no sign of the hikes coming to a halt in the immediate future.

“This could have a profound impact on buyers, who suddenly find they’re priced out of the market.

“Some won’t be able to afford repayments at this level, whereas others may still be keen, but could find themselves falling short of affordability criteria.

“Plenty of sellers have refused to acknowledge this shift in the market, and are still pricing their homes at an average of £372,812 – up 1.1% in a year.

“It remains to be seen whether they’ll find buyers at this level, or whether we’ll see prices cut as reality dawns.

“Rightmove tends to reveal a rosier picture of buyer demand than separate figures from RICS.

“However, even Rightmove says demand has remained flat in recent weeks.

“The number of sales, meanwhile, has fallen by 6% compared to the same period in 2019.

“It’s worth bearing in mind that we haven’t seen the full impact of mortgage rises reflected in the figures yet.

“There are still buyers with much cheaper deals in their back pocket – agreed before the rises over the past month.

“Once they’ve bought, we may not see them replaced at anything like the same rate, which means we could see a bigger impact during the rest of the summer.

“For buyers who’ve priced their home pragmatically, there’s still the demand left for a quick sale.

“For those who’re ignoring the elephant in the room, there’s likely to be a slow and painful deflation of both optimism and house prices.” 

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay