New seller asking prices fell by an average of £82 this month to £372,812, the first monthly drop in asking prices this year and the first June fall since 2017, Rightmove data shows.
The fall this month follows a 1.8% increase in May, according to the property website’ latest House Price Index.
It continues to forecast an overall 2% annual drop in new seller average asking prices by the end of the year.
The report says: “The delayed spring bounce in May has quickly turned into an earlier-than-usual summer price slowdown. Asking are prices set to fall in most months for the rest of the year in line with the usual seasonal pattern.”
It adds that annual price growth slowed to 1.1% this month, from 1.5% in May.
The report says: “The disorderly mortgage market is creating uncertainty among movers with more change expected this week.”
The Bank of England’s Monetary Policy Committee is widely expected to raise the base rate by 25 basis points to 4.75% on Thursday, the 13th rise in a row, as it bids to battle inflation.
However, the survey says despite some “significant increases in mortgage interest rates over the last few weeks” the is currently show no effect on buyer demand and only a “slight impact on sales activity”.
Buyer demand over the last two weeks is 6% higher than in the same period in 2019’s more normal market, it points out.
While the number of sales being agreed in the last two weeks is 6% behind the same period in 2019, compared to being 3% behind in May.
Tim Bannister Rightmove’s director of property science says: “Agents report that new sellers are sitting in two camps – those who still have over-optimistic price expectations following the buoyant pandemic market, and those who have adapted to the new conditions and are coming to market with a competitive price.”
MT Finance director of property lender Tomer Aboody adds: “While it seemed a few weeks ago that we might be nearing the ceiling of rates rises, this past month and sentiments have shown that there’s still a way to go.
“The uncertainties, along with rate rises, have inevitably resulted in an insecure situation, with buyers not desperate to pull the trigger since they’re not sure what will happen with mortgage rates and whether they will meet affordability criteria once they come to take out a deal.
“Is it now time to get used to a ‘new world’ of interest rates trending at around 5% to 7%, with buyers expecting and accepting these levels and making the numbers work for their situation, as well as being realistic as to what they can afford?”
Shawbrook managing director of real estate points out: “The housing market continues to face challenges with confidence amongst buyers impacting prices.
“The combination of high interest rates and inflation continues to be a heady mix, prompting buyers to remain hesitant.
“However, professional investors and landlords may find this an optimal time to add to their property portfolio, making the most of deals within the market.”
