Average asking prices for newly listed homes in Britain rose in September for the first time since May, offering an early sign of the housing market’s usual autumn pick-up after a subdued summer. The average asking price increased by 0.7%, or £2,441, to £367,440.
The rise was stronger than the average September increase of 0.5% recorded over the past decade. Yet the wider market remains under pressure, with prices still 0.8% lower than a year ago and 2.3% below their level at the start of the summer.
Seasonal Activity Returns, but Affordability Remains a Constraint
September traditionally brings more activity as buyers and sellers return from summer holidays and restart moving plans. According to Rightmove, several heatwaves and the World Cup contributed to an unusually quiet summer, leaving room for a stronger seasonal rebound when activity resumed.
The property website has also recorded the expected increase in home-moving activity between August and September. Buyer demand, though, remains 9% below the same period last year as affordability continues to limit what many households can spend.
Mortgage costs are adding to that pressure. The average two-year fixed mortgage rate is now 5.29%, up from 5.09% last month and 4.25% before the war in Iran began. According to Financial Reporter’s account of the Rightmove figures, the average monthly payment on a new mortgage is around £180 higher than it was before the war started at the end of February.
The Bank of England kept interest rates unchanged at 3.75% last week, while fixed mortgage rates have continued to rise amid increases in swap rates, which are used in mortgage pricing.
New property listings are flat month on month and 3% lower than a year ago. At the same time, the number of agreed sales is 9% below last year, even though the overall number of homes available for sale has reached a 12-year high for this point in the year.
Sellers Face Sharp Regional Differences in Their Chances of Finding a Buyer
The crowded market is producing markedly different outcomes around Britain. Rightmove data shows that a home currently listed for sale has, on average, a 61% chance of finding a buyer. In 2021, that figure stood at 74%, when demand was higher and supply more limited.
Regional differences are substantial. According to Rightmove, 91% of homes for sale in Scotland are finding a buyer, partly because of the country’s different buying and selling practices. The equivalent figure is 71% in the North West of England and 56% in the South East.
London stands out at the other end of the range, where only 42% of homes listed for sale are finding a buyer. Rightmove said affordability is more stretched in the capital and there is a larger imbalance between supply and demand.
Pricing is also playing a major role in whether properties sell. Rightmove’s analysis found that 74% of homes sold so far this year were priced correctly from the outset and did not require a later reduction in the asking price.
Colleen Babcock, property expert at Rightmove, said September’s increase should be regarded as “a modest recovery rather than a major turning point”. She added that sellers face competition from a 12-year high number of available homes, while buyers continue to have substantial choice as mortgage rates rise.
