The property listings giant, Rightmove, reported that over-optimistic initial pricing of homes led to longer selling times and eventual asking price cuts on 32% of homes in a tough housing market. Despite this, ambitious sellers continued to price higher. The imbalance between supply and demand has created a highly competitive market where buyer choice has reached its highest level for any May since 2015.
A third of homes for sale have been reduced in price, Rightmove has revealed, as sellers struggle to find buyers in an increasingly tough market.
The property listings giant said 'over-optimistic' initial pricing was leading to longer selling times and eventual asking price cuts on 32 per cent of homes. The imbalance between supply and demand means buyer choice has reached its highest level for any May since 2015, creating a highly competitive market where home hunters can be much more selective. Despite this, ambitious sellers continued to price higher.
Over the past month the average price tag of a home newly listed for sale rose £4,333, or 1.2 per cent, to £378,304. Rightmove said agreed sales this month were 4 per cent lower than at this point a year ago, when mortgage rates were 'significantly lower', albeit they were 2 per cent higher than at this time in 2024.
According to Rightmove's analysis, a home reduced in price takes 91 days longer to sell than a property that has not needed to have its price cut. Ups and downs: Average property asking prices since May 2021, according to Rightmove RELATED ARTICLES Share this article Share HOW THIS IS MONEY CAN HELP The online property portal sounded a note of optimism, saying the housing market was not buckling under the weight of higher mortgage rates and remained 'confident overall despite global uncertainty and resulting cost-of-living pressures.
' Buyer affordability continues to drive a marked year-on-year North-South divide in price growth. In the North East, where homes are more affordable, the average newly-listed price tag was £200,789, up 2.7 per cent on a year ago. In the North West, the average price tag of newly-listed homes was 2.6 per cent higher than a year ago.
In contrast, in London the average price tag dropped 2.4 per cent annually to £685,347. In the South East, the average cost of a property coming to market was 1.6 per cent lower than a year ago, at £489,561. Coleen Babcock, a property expert at Rightmove, said: 'It's normal to see asking prices pick up as we move through the spring selling season.
'What's notable this month is that activity in the market is staying fairly steady, even with the ongoing cost-of-living pressures and wider global uncertainty. ' She added: 'Prices are rising in the North, but all buyers should note that buyer choice is now at its highest level for this time of year since 2015. ' Rightmove said the average two-year fixed rate mortgage had fallen to 5.18 per cent, from 5.42 per cent a month ago.
The shift means monthly mortgage repayments on this type of deal were about £50 lower than the previous month. Read More Why now is the worst time in 15 years to sell your home: We speak to sellers who are stuck How long are homes taking to sell? Finding a buyer for a property in London currently takes around 71 days, Rightmove said. In the South East is takes 67 days.
In the South West, where the average asking price is £389,772, it takes roughly 68 days to find a buyer. In Yorkshire, the average time taken to find a buyer is 62 days, falling to 61 days in the West Midlands, 57 days in the North West and just 31 days in Scotland. Babcock said: 'Getting the asking price right from the outset is therefore increasingly important, as homes priced too ambitiously are taking longer to sell.
' Research published by Zoopla this month revealed that than two in five homes put on the market in the past three years did not go on to sell. It said many sellers are setting unrealistic asking prices which put potential buyers off. It surveyed 2,000 people who had listed their home with an estate agent in the past three years, and 44 per cent said the property never sold.
Of those, 34 per cent admitted in retrospect their asking price was 'too high'. Among those who did sell, 53 per cent said they had to cut their asking price before they found a buyer. In the first three months of this year, homes listed on Zoopla typically sold for 3.5 per cent below the asking price. This is a cut of £18,800 on an average–priced home.
Join the discussionAre overpricing homes making it impossible for real buyers to get on the property ladder? What's your view? How to find a new mortgage Mortgage rates have soared after conflict with Iran has driven up inflation expectations and dashed hopes of interest rate cuts. If you need a mortgage because you are buying a home, or your current fixed rate deal is due to end, you should explore your options as soon as possible.
This is Money has a long-standing partnership with fee-free broker L&C, to provide you with expert mortgage advice. Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. Or use L&C’s online Mortgage Finder to search thousands of deals from more than 90 different lenders to discover the best deal for you. This is Money's mortgage tips What if I need to remortgage?
Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying arrangement fees.
If you do this and don't clear the fee on completion, interest will be paid on it over the term of the loan. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power.
What about buy-to-let landlords? Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. >Find your next mortgage deal with This is Money and L&C Mortgage service provided by London & Country Mortgages , which is authorised and regulated by the Financial Conduct Authority .
The FCA does not regulate most Buy to Let mortgages. Your home or property may be repossessed if you do not keep up repayments on your mortgage
Housing Market Sellers Struggle Price Cuts Tightening Market Increased Competition
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