UK House prices finally starting to correct
The UK property market is entering a more challenging period for sellers, with rising mortgage costs, increased competition and more cautious buyers putting pressure on asking prices. Recent figures from Rightmove highlight just how much market conditions are changing, with thousands of homeowners reducing their asking prices every day.
For anyone thinking about selling, buying, renting or investing in property, these developments are worth paying attention to. Buyers are becoming increasingly selective, sellers are having to reconsider their expectations, and landlords must carefully assess how changing mortgage costs and rental demand could affect their investments.
At the same time, a growing number of properties coming onto the market means buyers have more choice than they have had for several years. This creates opportunities for those looking to move, but it also means that getting the right advice has never been more important.
In this guide, we explore what the latest property market figures mean for homeowners, prospective buyers, landlords and tenants, and why professional guidance can make a real difference when deciding your next move.
Homeowners Are Reducing Asking Prices as Market Conditions Change
One of the most striking findings from Rightmove's latest figures is the scale of asking price reductions across the UK.
According to the reported data, more than 3,000 properties had their asking prices reduced every day during September. The average reduction was almost 7%, equivalent to approximately £21,000 on a typically priced property. Around 34% of properties listed for sale had undergone a price reduction, approaching the recent peak of 36% recorded in September 2023.
These figures suggest that many sellers are having to adjust their expectations to reflect what buyers can realistically afford and what comparable properties are achieving. For homeowners, this can be difficult to accept. A property may hold considerable sentimental value, and sellers naturally want to achieve the best possible price. However, the price a homeowner hopes to achieve and the price a buyer is prepared to pay are not always the same. The market ultimately responds to affordability, demand, property condition, location and the availability of similar homes.
When buyers have plenty of options, they are less likely to pay a premium for a property that is priced above comparable alternatives. The key takeaway for sellers is simple: a realistic asking price from the beginning can help attract serious interest and avoid the need for repeated reductions later.
Why Overpriced Properties Can Take Three Times Longer to Sell
Pricing a property correctly from the outset has always been important, but the latest figures highlight just how significant it can be in the current market. Rightmove's research found that properties requiring a price reduction took an average of 119 days to find a buyer. By comparison, homes that sold without an asking price reduction found a buyer in an average of just 39 days.
That is more than three times as long.
Although individual results vary depending on location, property type and market conditions, the difference highlights the potential cost of starting too high.
Why does overpricing create problems?
When a property first comes onto the market, it often receives its greatest concentration of attention. Buyers who have been searching for weeks or months may be quick to arrange viewings when a suitable property appears.
However, if the asking price is too high, prospective buyers may dismiss the property before viewing it. They might also find a similar home offering better value elsewhere. As the weeks pass, interest can begin to fade. If the seller eventually reduces the price, some buyers may question why the property has remained unsold. A reduction does not necessarily mean there is anything wrong with the home. Nevertheless, buyers may wonder whether previous offers have fallen through, whether the property needs work or whether the seller is becoming increasingly motivated to accept a lower offer. In a market where buyers have greater choice, these perceptions can influence negotiations.
The importance of getting the price right
A professional valuation should take account of recent comparable sales, competing properties, local demand, the property's condition and the type of buyer most likely to be interested.
It is also important to distinguish between an asking price and a property's likely achieved sale price. The asking price is a marketing figure, while the final sale price depends on the level of demand and the offers received.
Setting the right price does not mean automatically choosing the lowest valuation. It means establishing a credible, competitive position that encourages buyers to take the next step.
Rising Mortgage Costs Are Putting Pressure on Buyers
Mortgage affordability remains a major consideration for people looking to purchase a home.
According to the figures provided from Rightmove's latest House Price Index, the average two-year fixed mortgage rate reached 5.55%, compared with 5.29% the previous month. The equivalent rate was reported at 4.25% before the conflict involving Iran began in February.
Rightmove estimates that the increase has added approximately £250 per month to the cost of a typical new mortgage.
For many households, an additional £250 every month is a substantial amount. It can affect how much they can borrow, the deposit they need and the type of property they can realistically afford. For first-time buyers, already facing the challenge of saving a deposit while managing rent and everyday expenses, higher borrowing costs can make getting onto the property ladder more difficult. Homeowners looking to move may also need to reconsider their budgets, particularly if they are moving from an older, lower-rate mortgage to a new deal at a higher rate.
How could this affect the property market?
When borrowing becomes more expensive, some buyers delay their plans, while others reduce their budgets or focus on smaller properties. This can reduce competition for certain homes and increase pressure on sellers who need to achieve a particular price.
However, it does not mean that all buyers have disappeared or that every property will lose value. Well-presented homes in desirable locations can continue to attract interest, especially when priced appropriately. For buyers, the most important step is to understand their affordability before beginning their search. Speaking to a qualified mortgage adviser can help establish a realistic budget and explain the options available.
More Properties for Sale Mean Greater Competition
The latest figures also point towards a growing supply of homes on the market. Across Britain, sales agreed were reported to be 8% lower than during the same period a year earlier. Buyer enquiries had fallen by 9%, while new property listings increased by 3%.
As a result, the number of homes available for sale reached its highest seasonal level since 2014. For buyers, more choice can be positive. It gives them greater opportunity to compare locations, property types, condition and asking prices before making a decision.
For sellers, however, it creates a more competitive environment. A property is no longer competing only with homes in the immediate street. It may also be competing with similar properties in neighbouring areas, homes with additional bedrooms, properties with better outdoor space or those offering more attractive asking prices.
What should sellers do?
The answer is not simply to reduce the asking price without considering the circumstances.
Instead, sellers should understand their competition and ensure their property is presented in the best possible light.
Professional photography, a well-prepared listing, accurate property details, flexible viewing arrangements and a sensible marketing strategy can all help a home stand out.
An experienced estate agent can also explain how a property compares with similar homes and whether adjustments to its marketing strategy may be necessary.
In a market with more choice, the objective is to give buyers a compelling reason to arrange a viewing and make an offer.
What Does This Mean for Home Sellers and Vendors?
For vendors, the current market is a reminder that preparation and realistic expectations are essential.
Selling a property can involve considerable expense, time and emotion. Whether you are moving for work, upsizing for a growing family, downsizing in retirement or selling an inherited property, you will want the process to run as smoothly as possible.
However, setting an unrealistic asking price can make that process more difficult. Avoid chasing the market down
One common mistake is launching a property at an ambitious price with the intention of reducing it later if necessary. Although this may appear to leave room for negotiation, it can result in the property missing its initial window of buyer interest. If a home receives limited enquiries or viewing requests, the seller may eventually have to make a more substantial reduction to regain attention.
By contrast, a competitive asking price from day one can attract a wider pool of potential buyers and create a stronger starting point for negotiations.
Is this a good time to buy an investment property?
A more competitive sales market may create opportunities for investors to negotiate on purchase prices.
However, a lower purchase price alone does not guarantee a successful investment. Landlords should carefully assess achievable rent, tenant demand, void periods, property condition, financing arrangements and the potential for future costs.
It is also important to understand the relevant legal and regulatory responsibilities before purchasing a rental property.
Should landlords sell or hold?
There is no single answer that applies to every landlord.
Some may decide to retain properties that generate sustainable income and have long-term potential. Others may consider selling if refinancing costs, maintenance requirements or changes in their financial circumstances make an investment less attractive. The decision should be based on the individual property's performance and the landlord's wider objectives, rather than headlines about national house prices alone.
A professional rental valuation and an assessment of current tenant demand can help landlords understand their options before making a decision.
Looking Ahead: What Could Happen Next?
The direction of the property market will depend on several factors, including inflation, mortgage rates, household finances, buyer confidence and the supply of homes available.
If mortgage costs remain elevated, some buyers may continue to be cautious, potentially putting further pressure on sellers whose asking prices do not reflect current affordability.
If borrowing conditions improve, buyer confidence could strengthen and competition for certain properties could increase. The forthcoming Budget may also influence confidence if households and property investors delay decisions while considering potential changes to their finances.
However, predicting the exact direction of house prices or interest rates is difficult. Buyers and sellers should avoid making major decisions based solely on expectations of future rate cuts or price movements.
Instead, focus on what is manageable and appropriate for your own circumstances. For sellers, that means understanding the property's realistic market position. For buyers, it means ensuring the purchase is affordable. For landlords, it means reviewing the performance of their investments. For tenants, it means understanding their options and planning ahead.
Thinking About Buying, Selling or Letting? We’re Here to Help
Whether you are preparing to put your home on the market, searching for your next property, reviewing a rental investment or looking for a suitable home to rent, our team is here to help you understand your options.
We understand that every property situation is different. You may be wondering how much your home could realistically achieve, whether your asking price is competitive, what your property could rent for or how current market conditions might affect your plans.
A conversation can help you identify the questions to ask, understand the next steps and decide how best to move forward.
Call us today on 0121 681 6327 to discuss your property situation.
Whether you are buying, selling, letting or renting, we are here to help you take your next step with greater confidence.