House prices fall as ‘summer slowdown’ starts early

The average new seller asking price fell sightly in June as the usual ‘summer slowdown’ began early in the face of rising interest rates, Rightmove has reported.

The property market portal said the average price fell slightly, by 0.02% to £372,812 in June compared to the previous month. The drop, albeit very small, is the first fall in the month of June since 2017 and the first fall in monthly prices this year.

Rightmove said the usual spring ‘bounce’ was first delayed and has now turned into an earlier than usual summer slowdown, as rate rises ‘quashed’ price rises. The company is still predicting an overall 2% drop in house prices by the end of 2023.

A Rightmove spokesperson said: “On average over the previous ten years we have seen an increase of 0.6% in asking prices at this time of year, indicating that buyer affordability constraints and more pricing realism from new sellers have brought forward the usual summer slowdown.”

The firm is pointing to the increase in mortgage rates as a possible factor. The average rate for a 5-year fixed 85% loan-to-value mortgage at the time of writing is 5.2%, up from 4.56% four weeks ago.

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He said: “There have been some significant increases in fixed mortgage interest rates over the last few weeks following stubbornly high inflation figures, piling pressure onto already very stretched budgets.

“These increases in rates and monthly mortgage payments may mean that some have to pause their plans for now”

However, Rightmove found that demand appears to be holding up with the the number of enquiries 6% higher than in the same period in 2019 pre-pandemic. However sales are 6% lower than in 2019.