UK house prices had a subdued August thanks to continued high interest rates and summer holidays, new data has found.
According to Rightmove, average new seller asking prices increased by a marginal 0.4% during the month, rising £1,386 to £366,281. But this was lower than usual for this time of year, the online real estate property portal said.
On an annual basis, the price change dropped further to -0.4%, the biggest fall since March 2019.
Rightmove added that 6.3% of properties currently for sale have had a price reduction, with an average reduction equating to £22,700 nationally (6.2%).
Meanwhile, the number of sales agreed in August across all property types slipped 18% compared to August 2019.
However, there were some signs of activity starting to pick up, with back-to-school sellers helping the number of new properties coming to market to jump by 12% in the first week of September. This is compared with the average weekly number throughout August.
There were also small steps towards improved buyer affordability as mortgage rates continue to fall from recent records. The average five-year fixed mortgage is now at 5.67%, in the seventh consecutive week of five-year fixed rates dropping, after peaking at 6.11% in July.
“It’s been a slower than usual August, so all eyes will be on market activity over the next few weeks, which will set the trend for the rest of the year,” Tim Bannister, Rightmove’s director of property science, said.
“The combination of 14 consecutive Bank of England interest rate rises and many buyers and sellers still catching up on lost pandemic holidays has contributed to a bigger than expected summer lull, though we still anticipate an autumn bounce.
“Market conditions still vary considerably in different locations, and so a local estate agent will be best placed to advise sellers to give them the best chance of finding a buyer this autumn.”
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It comes as new data from Foxtons also revealed that average weekly rent this year is on the rise. Figures for 2023 are 11% higher than last year, with rental prices remaining high for the third month in a row.
Foxtons analysis of Zoopla data showed there were over 35,000 new instructions this August, a decrease of 7% from July. However, this was up 8% compared to 2022 year to date.
More than 10% of these new instructions across London were in Westminster, which had the highest proportion of instructions compared to other boroughs.
London continued to experience the highest rental applicant budgets seen in recent years, with a 7% increase compared to 2022 year to date.
Renter spend rose 1% month on month, with applicants spending on average 100% of their rental budgets to secure a tenancy in August.
“August had, as it always does, the largest volume of registrations of any month this year. Prices remained immovably high, and year to date, London is seeing its highest average rent prices in the last three years,” Sarah Tonkinson, managing director of Institutional PRS and Build to Rent at Foxtons, said.
“On the other hand, with London demonstrating more robust stock levels than in 2022, we can clearly see what “normal” will look like in the market to come. It will be on landlords, developers, and their agents to differentiate their listings, utilise London’s renter demand and attract good tenants to their property, as we head into autumn.”