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What’s happened in the housing market this month?

There’s been lots of news coverage about house prices and mortgage rates this year. If we look back to the end of 2022, after the mini-Budget announcements, we were seeing predictions of double-digit house price falls. But, a year on, as we head into the winter months, asking prices are 1.3% lower than they were this time 12 months ago.

At this time of year, we usually see asking prices dip slightly, as new sellers putting their homes on the market look to find a buyer before Christmas. But this month, we’ve seen prices dip more than usual. The average asking price of a home in Great Britain is now £362,143, which is 1.7% (-£6,088) below last month, and the biggest November fall for five years. This indicates that many new sellers are pricing more competitively in an attempt to find a buyer.

Read more in our monthly House Price Index

Our property expert, Tim Bannister, says: “We’d expect to see a drop in new seller asking prices in the last couple of months of the year. However, the larger than usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition.”

The extremely busy market we saw throughout 2021 and into 2022 meant there was a shortage of homes for sale, with lots more people looking to move than there were homes available. But we’ve now settled into a much more even balance between supply and demand, with the number of homes listed for sale now just 1% behind the pre-pandemic, 2019 average. This is creating space for buyers to spend more time searching for a home that’s right for them.

What’s the average house price in Great Britain?

National average asking price

Month Average asking price Monthly change Annual change
November 2023 £362,143 -1.7% -1.3%
October 2023 £368,231 +0.5% -0.8%

National average asking price by market sector (excluding inner London)

Sector November 2023 October 2023 Monthly change Annual change
First-time buyers £223,426 £224,263 -0.4% -0.2%
Second-steppers £333,263 £337,445 -1.2% -1.6%
Top of the ladder £658,840 £674,168 -2.3% -1.4%

*First-time buyer homes includes all 2-bed properties and smaller that come to market (houses and flats).

Matt Nicol, Managing Director at Nicol & Co in Worcestershire, says: “Buyers have much more choice than a year or two ago, meaning if sellers price too optimistically, they are going to look towards their more competitively priced neighbours.”

Though buyers have more choice when looking for their next home, they’re also faced with much higher mortgage rates compared to previous years. And even though they’ve dropped since the 2022 post-mini-budget peak – the average 85% LTV 5-year fixed mortgage rate is now 5.43%, down from 5.95% a year ago – these increased monthly payments have continued to affect buyer affordability throughout 2023.

What could happen next?

Mortgage rates have continued to edge down after two recent Base Rate holds from the Bank of England, and inflation is forecast to fall in the next set of data released this month. There are signs that confidence is growing among buyers: sales agreed are now just 10% behind 2019’s levels, improving from a 15% lag last month.

Tim adds: “This year has brought many new challenges for buyers, sellers and estate agents to navigate. While there have been many twists and turns, and there are still seven weeks left of the year, the data indicates that there has been more to be positive about in 2023 than many thought there would be at this time last year. The upcoming Autumn Statement on 22 November will now set the tone heading into 2024, particularly if there are any major policy announcements.”

What’s the picture across the nation?

It’s important to remember this month’s 1.7% price drop is an average, and the changes will differ depending on where you are in Great Britain, as well as the type of property you’re looking to move to.

We’ve seen house prices reduce since last month in every region of the nation. But in terms of the change compared to the same period in 2022, we’ve actually seen house prices increase in the northern regions of England, Scotland, and Wales.

You can read more about average house prices in your area, as well as the time it takes to sell and other market trends, in our latest House Price Index.

What’s happening with mortgage rates?

We’ve seen mortgage rates slowly edge downwards since their peak at the end of July. You can keep an eye on the current UK mortgage rates for different deposit sizes here, and check how they compare to last week.

If you’re thinking of moving, a mortgage broker or adviser can talk through your specific circumstances to help determine the best lender for you, as well as explaining the type of mortgage that could be the best fit.

You can also apply for a Mortgage in Principle online, to give you an idea of how much you could borrow. It’s quick, free, and your credit score won’t be affected.

The header image for this article was provided courtesy of Ashtons, Berkhamsted.

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