House prices fall for the first time in 2022
It’s the August summer holiday season, and the first year that many people have been able to head off on a sunny getaway without the travel restrictions that were put in place during the pandemic.
So what has this got to do with house prices? Well, many home-movers tend to put off their moving plans until after the summer holidays. So, because there are fewer properties being put on the market, and fewer people looking to move, there tends to be a seasonal drop in prices around now. And this August is no different, as we’ve seen house prices fall for the first time this year.
The average asking price of a home in Great Britain fell by almost £5,000 to £365,173. This is a drop of 1.3%, which is on a par with the average August drop over the past 10 years.
Our property expert Tim Bannister says the price fall is to be expected this month, as the summer holidays are in full swing and the housing market returns towards normal seasonal patterns after a busy two years.
And some estate agents are advising people to hold off putting their home on the market until September, including Jordan Yorath, a Partner at Monroe Estate Agents in Leeds.
He says: “After a prolonged period where many people’s lives were restricted in terms of holidays and travel, we felt best that clients seek to launch their properties outside of the month of August in particular, so that they could reach the maximum number of engaged buyers when they come to market. We have been busy preparing for the rest of the year, with a great number of listings also ready for September onwards.”
Have interest rate rises affected house prices?
The sixth consecutive interest rate rise, this time by 0.5% to 1.75%, will no doubt be in the minds of many would-be home-movers.
It’s likely that the impact of these rises will gradually filter through during the rest of the year, but at the moment they’re not having a significant impact on the number of people wanting to move.
Right now, the mismatch between strong levels of buyer demand, and the number of homes available to buy, is still the biggest factor influencing asking prices outside of seasonal trends.
Will house prices continue to fall this year?
While buyer demand has started to ease compared to the exceptionally busy market of 2021, there is still enough of an imbalance to prevent major price falls this year.
The autumn months are traditionally a busy period for the housing market, bringing potential price rises as people look to move before the new year. Prices then tend to cool off again as we head into December and the festive season.
“We’re still expecting price changes for the rest of the year to continue to follow the usual seasonal pattern, which means we’ll end the year at around 7% annual growth, even with the wider economic uncertainty,” says Tim.