House prices are beginning to fall: Here’s why

Latest figures have revealed that house prices have fallen for the first time in 2022, which could be welcome news for those looking to move. Here, we look at what the average values are coming in at and delve deeper into why the prices are beginning to fall.

A season of change?

According to Rightmove, the average property in the UK dropped to around £365,000 in August, which is a 1.3% decline. While many immediately blamed rising interest rates, Rightmove has confirmed that it’s most probably down to the summer season. More specifically, with many people away on holidays and children off school, most home buyers put off their search until they have a little more time. This reduction in demand results in a small price reduction. 

In fact, patterns like this within the property market are actually normal and it’s something we saw regularly at Kaytons – before Covid-19. Around this time of year, it’s also not uncommon for people wanting to be in their new home in time for Christmas. In order to move quickly, some homeowners drop the price of their property – especially when average moving times are around 4-5 months. 

Or a market leveling out?

The slight drop in prices could be a result of the interest rates though. In fact, many believe interest rates could continue to creep, meaning higher costs, and pressures on home buyers. But instead of reversing the house price growth, it could just slow it down. With this in mind, Rightmove is still forecasting that average UK home prices will be 7% higher at the end of 2022, compared to 2021. 

What’s more, there’s still a lack of supply when it comes to available properties. Compared to 2019, stock is down by 39%. While buyer inquiries are down by 4% compared to in 2021, a lack of available properties is likely to push prices back up again. 

So, what’s the answer?

The truth is, despite these figures, the property market moves quickly and could change. If you are looking to move but are worried about rising interest rates, it’s wise to sit down with a mortgage advisor to see what you can afford, and confirm what rates are available to you. That way, you know exactly what position you’re in. At Kaytons, we even have a specialist mortgage contact that we’d be delighted to introduce you to. 

If you’re looking to sell, and want to be in before Christmas, you might not always need to drop the asking price. Instead, a variety of marketing, home staging and some quick home improvements could do the job – but our experienced property professionals can advise on your situation. Either way, our team is always here to help in Manchester. Call us on 0161 6721144 or pop into our office.

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