The average price of property coming to the market for sale has risen by 0.4% this month to £370,257, according to the latest Rightmove house price index.
Despite this month’s increase in prices, the first since May, the average asking price for a home in Great Britain is now 0.1% lower than a year ago. This first annual price drop since January 2024 is the culmination of several months of competitive pricing by new sellers over the summer.
It is this attractive pricing which has continued to drive stronger buying activity in the high-supply market, with the number of sales being agreed now 4% higher than at this time last year.
Beneath the overall national average, it’s London and the more muted south of England which are driving the annual dip in prices, while prices across other regions in Great Britain are more robust. Activity trends in the south of England are underperforming the rest of Great Britain, and while there’s a long way to go until the Autumn Budget on November 26th, if the mooted property tax changes become reality, they could exacerbate this underperformance.
The West Midlands (-0.1%) is the only more northern region to record a yearly drop in new seller asking prices. In the South West, prices are down by 1.3% compared with last year, while in the North West they’re up by 3.2%, highlighting the south’s underperformance.
The decade-high number of homes for sale is more pronounced in the south of England, contributing to the lower pricing, as sellers look to stand out among the more plentiful competition. The number of homes for sale in the south of England is up by 9% on this time last year, compared to 2% across the rest of Great Britain. It also takes an average of five days longer to find a buyer in the south of England than in the north and Wales, while Scotland is much faster than other regions.
However, the overall number of sales being agreed is up by 4% on last year. While this figure is +5% in areas outside London and the south of England, the south has still seen a 3% increase in sales year-on-year. This highlights that despite some regional challenges, buyers are still active in these areas for the right property at the right price.
Rightmove’s market data has detected no immediate sign of movers changing their plans due to stamp duty and mansion tax rumours. However, jitters caused by the uncertainty over what could happen in more than two months’ time risk slowing the parts of the market which would be most impacted. Both tax changes would disproportionately affect London and higher-priced areas, and risk exacerbating regional divides.
If the government changed the way stamp duty works on properties over £500,000, more than half (59%) of sales in the capital would be affected. By contrast, it is 22% on average across the rest of England, and in the North East it is just 8%. Furthermore, more than one in ten homes (11%) in London are priced at £1.5 million pounds or more and would be subject to the rumoured mansion tax, versus an average of just 2% outside the capital.
Colleen Babcock, property expert at Rightmove, commented: “We’d expect to see a slight uptick in new seller asking prices in September, with the traditional back to school season boosting activity heading into autumn. This year’s 0.4% September price rise is a little lower than the norm, which is an average of 0.6% at this time of year. However, prices have now dipped slightly from where they were at this time last year after a summer of competitive pricing by sellers, and it’s the south of England which is driving this small dip. It’s the sensible and attractive seller pricing we’ve been reporting which has been helping to drive more sales activity compared to last year. Static house prices, rising wages, and lower mortgage rates all assist buyer affordability, which has led to an increase in the number of sales agreed compared to a year ago.
“Rumours of property tax changes began swirling in mid-August, and with the Budget itself not arriving until the end of November, this kind of extended uncertainty can affect market activity, especially in the higher price brackets. Movers want to be confident in planning their moving costs. Our real-time data has not yet picked up any major shifts, however it’s understandable that those who could be negatively affected by the rumoured changes might be in the process of reassessing their short- and medium-term plans. Our analysis highlights how London and south England-centric the changes would be, and these are the areas that are already performing less strongly.”
Matt Smith, Rightmove’s mortgage expert, added: “Mortgage rates have edged upwards over the last few weeks as global events have made mortgage financing a little more expensive. Inflation is also proving sticky, and as we saw in the commentary from the Bank of England at the last rate decision, there is some uncertainty from the Bank about the future road of rate cuts. Like in the housing market, we often see a bounce in lender activity in September after the summer holidays so we can expect lenders to remain as competitive as possible to secure business. The rhetoric around mortgages continues to be about how lenders can unlock greater affordability by allowing people to responsibly borrow more, which is encouraging for the market, particularly first-time buyers.”
