Biggest fall in property prices for four years recorded
This month has seen an average drop of nearly £8,000
The average price tag on a home plummeted by almost £8,000 this month - the largest dip seen in four years, according to new data.
Figures from Rightmove show asking prices across the UK for newly listed properties dropped by 2.1% in December, equivalent to £7,862,
The property portal said it is a bigger drop than the usual seasonal slowdown, indicating that buyers have put moving plans on ice, amid greater economic turmoil and widely-reported mortgage rate surges.
At the end of 2022, average prices are 5.6% higher than at this time a year ago - and just below the 6.3% level or growth recorded at the end of 2021.
Rightmove suugested a less frenzied housing market means that sellers have been more willing to lower their asking prices, in efforts to find a buyer more quickly.
"Though we would always expect prices to drop in December, as motivated sellers try to capture the attention of a buyer before Christmas with a competitive price, this monthly dip is the largest we've seen for four years", Tim Bannister, Rightmove's director of property science said.
"It's an understandable short-term reaction to the economic turmoil and unexpectedly rapid mortgage rate rises and reduction in availability of mortgage products that we saw in late September and October, before things began to settle down."
Buyers 'holding out'
However, there are signs that some buyers could be waiting for the market to settle and holding out for a better fixed-rate mortgage deal in the new year, Rightmove said.
Enquiries to estate agents were up by 4% over the past two weeks compared to 2019, and the number of views of homes for sale on Rightmove is up 11% on last year.
"Our data suggests that there are many ready-to-go movers out there waiting for what they feel to be the right time to enter the market in 2023", Mr Bannister said.
He added that there could be a bounce back in prices in February following the busy home-moving period in January.
Rightmove predicts an overall drop of 2% in average asking prices next year as economic headwinds persist and the market normalises.
Property transactions expected to fall
The data comes as trade body UK Finance said it expects the number of property transactions to fall by more than a fifth next year, returning the market to pre-pandemic levels.
It also estimates that mortgage lending to homeowners will drop in value by 23% due to affordability pressures facing borrowers and higher interest rates.
However, the vast majority of borrowers will be able to maintain their mortgage payments, and arrears are likely to increase only marginally, UK Finance said.
James Tatch, principal of data and research at UK Finance said: "The high level of activity during the 2021 stamp duty holiday means that a large number of borrowers are due to refinance next year, pushing up the expected value of re-financing in 2023.
"The pressures being seen on household finances could mean that some customers have fewer options.
"However, there is wide availability of product transfers, and we would encourage customers to speak to a whole of market mortgage adviser to discuss the options best suited to their circumstances."