As mortgage rates begin to tighten, overall asking prices have slipped slightly over the past month, yet listings in London have risen unexpectedly, according to data from Rightmove. The median asking price for newly listed homes in the capital increased by 2.5% as sellers aim to attract buyers eager to move before the Christmas period.
A regional split
In Inner London – the most pricey segment of the city – the average asking price climbed 3.9%. At the same time, sellers in less expensive regions have lowered their expectations. Prices demanded in the North East dropped 2%, in Scotland fell 1.9%, and in the North West slipped 0.6%. Rightmove analysed 104,164 listings posted between 12 September and 10 October. Across the United Kingdom, the aggregate asking price dipped 0.1% during that window, while it is 1% higher than the same period a year earlier.
The uplift in London follows a sluggish summer in which asking prices fell 6% throughout July and August. Even so, current asking levels remain 1.7% beneath those recorded a year ago, a larger decline than any other region. Sellers with flexible timelines often choose to list in autumn, when buyer activity traditionally picks up.
Colleen Babcock, Rightmove’s property specialist, said: “The rapid rise in mortgage rates is really beginning to hit buyers’ budgets. We’re now seeing mortgage rate rises feed through to seller pricing in many of the cheaper parts of Great Britain, where prices had been more resilient this year. It’s an early sign that higher mortgage costs are putting pressure on affordability even in markets with lower property prices, affecting the areas and types of property that buyers can afford.”
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Buyers face higher costs
Rightmove’s figures show that the monthly payment on a fresh mortgage is about £250 higher than it was in February, a shift driven by lenders raising rates amid inflation worries tied to the conflict with Iran. The portal notes that this development is discouraging purchasers in price-sensitive markets that had previously shown resilience.
Marc von Grundherr, director of Benham and Reeves estate agents in London, said: “We’re seeing something of an ‘enough is enough’ mentality among London sellers, many of whom recognise that while the market has been subdued this year, London bricks and mortar remain one of the strongest assets they can hold. For these homeowners, selling for anything less than what they consider a reasonable price simply isn’t a sensible move, particularly if they have little urgency to sell.”
Overall activity has slowed, Rightmove reports. The count of transactions agreed is 8% lower than a year ago, and enquiries from prospective buyers have dropped 9% over the same period. This contraction creates challenges for sellers trying to locate buyers in a market that remains crowded with listings. The total inventory of homes for sale sits at its highest seasonal level since 2014.
Although London sellers are posting higher prices this month, Rightmove’s metrics hint that optimism may be excessive. The data reveals that 38% of properties have had their asking price cut, and the average time to secure an accepted offer now stands at 78 days, roughly 11 weeks.
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