Rate rises quash spring price bounce but activity holds up
• Average new seller asking prices fall by £82 (-0.0%) this month to £372,812, the first monthly drop in asking prices this year and the first drop seen in the month of June since 2017:
• The delayed spring bounce in May has quickly turned into an earlier than usual summer price slowdown.
• Asking prices set to fall in most months for the rest of the year in line with the usual seasonal pattern, and Rightmove still predicts an overall 2% annual drop in new seller average asking prices by the end of 2023
• Despite some significant increases in mortgage interest rates over the last few weeks, Rightmove’s statistics currently show no effect on buyer demand but a slight impact on sales activity:
• Buyer demand over the last two weeks is 6% higher than the same period in 2019’s more normal market
• The number of sales being agreed has dropped marginally, and in the last two weeks is 6% behind the same period in 2019 compared to being 3% behind in May
• The disorderly mortgage market is creating uncertainty among movers with more change expected this week:
• More prospective buyers are checking their latest affordability, with daily visits to Rightmove’s Mortgage in Principle service jumping by 53% since the unexpectedly high inflation figures
• Ahead of this week’s inflation figures and Bank of England Base Rate decision, the average rate for a 5- year fixed 85% Loan-to-Value mortgage at the time of writing is 5.20%, up from 4.56% four weeks ago
The first-time buyer monthly mortgage payment is based on Bank of England data of the averages for 90% LTV two year fixed mortgages from lenders, and the average asking price of a typical first-time buyer home (two bedrooms or fewer) using the Rightmove House Price Index. The equivalent monthly rent is calculated using the same property types (two bedrooms or fewer). The affordability to buy a first home is based on the Average Weekly Earnings (AWE) dataset from ONS multiplied by 4.5 to get the typical maximum that a person can borrow from a lender. The average asking price of a typical first-time buyer home is taken from the Rightmove House Price Index.
Price & activity trends
Borough data is based on a three-month rolling average and can be used as an indicator of overall price trends in each borough over time. It is not directly comparable with the overall London monthly figures.