House prices to fall further next year as sellers drop prices says Rightmove

The average UK house price will fall one per cent next year as competition heats up amongst sellers, according to a new analysis from property portal Rightmove. 

Homeowners looking to shift a sale are likely to price more competitively next year, while mortgage rates are expected to remain “elevated” but will come down from the highs seen this year, the group said.

A year ago, Rightmove predicted average new seller asking prices would drop by two per cent in 2023. 

Prices are currently 1.3 per cent lower year-on-year and could fall further. The level of price reductions has accelerated during the year, as sellers have lowered prices to entice buyers.

Rightmove said the level of price reductions has increased during 2023, with 39 per cent of properties now seeing a price reduction during marketing compared to 29 per cent last year, and 34 per cent during 2019. 

However, the average time for a seller to find a buyer has jumped from 45 days this time last year to 66 days now, with those sellers who have been competitive on price able to find a buyer more quickly.

According to the latest reading from Nationwide UK house prices have grown 0.2 per cent from October to November, although they are still down two per cent on last year.

Tim Bannister, Rightmove’s property expert, said: “An average drop of one per cent in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024.

“However, the better than anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing and marketing strategy.”

He added: “This underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year.” 

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said that the forecast is “quite encouraging” bearing in mind Rightmove looks at asking, rather than selling, prices. 

He explained: “Such a modest change is unlikely to have much bearing on buyers’ intentions one way or the other. Certainly, we have seen over the last month or two activity has remained fairly consistent despite rocketing interest and inflation rates.”

“With mortgage payments and the cost of living starting to fall, while wage rises are more than holding their own, this is giving buyers confidence that we are at, or very close to, the bottom and prices are unlikely to change dramatically in the short term at least.”