House prices in Britain have fallen for the first time this year by an average of nearly £5,000, a property website has said.
New figures published by Rightmove reveal that the average price of a property dipped to £365,173 in August – a 1.3 per cent drop equivalent to £4,795.
Rightmove said the fall was in line with summer price trends over the past decade, despite fears it could be a result of rising interest rates sent soaring by spiralling inflation.
The property wesbite said the market would likely right itself once would-be home buyers returned to the country from their summer holidays.
Tim Bannister, a Rightmove director, said: “A drop in asking prices is to be expected this month as the market returns towards normal seasonal patterns after a frenzied two years, and many would-be home movers become distracted by the summer holidays.”
The property website said that sellers keen to have their properties taken off the market quickly – a process which takes on average four and a half months to complete – often drop their prices to ensure their customers can move in before Christmas.
With interest rates expected to inch up to 2.5 per cent by the end of 2022, according to several mortage lenders, the pace of house price growth is likely only to be slowed, rather than reversed, while costs for borrowers pile high.
Last month, Lloyds Banking Group, which owns Halifax and is the country’s largest mortgage lender, said its own rate of lending was still likely to grow over the next 12 to 18 months.
Despite fears that the soaring cost of living could send the country into a deep recession later this year, Rightmove said it still expects house prices to end the year 7 per cent higher than in 2021.
Rightmove also said that lack of housing stock, which is down by 39 per cent compared to 2019, would help to steady falling prices.
And although inquiries from prospective buyers are down 4 per cent compared with 202, they are still 20 per cent higher than before the the Covid-19 pandemic.
Bannister continued: “It’s likely that the impact of interest rate rises will gradually filter through during the rest of the year but right now the data shows that they are not having a significant impact on the number of people wanting to move.
“Demand has eased a degree and there is now more choice for buyers but the two remain at odds and the size of this imbalance will prevent major price falls this year.”
He advised house hunters concerned about rising costs should secure a mortgage in principle early in order to understand what they can afford, confirm the rates available and assess what they would be able to repay each month.