Asking prices dropped by £4,795 in August – the first time there’s been a slowdown this year, Rightmove’s house price index shows.
Typical asking prices fell by 1.3% between July and August, though they’ve still grown by 8.2% annually. Following the reduction the typical price of property is £365,173.
Tim Bannister, Rightmove’s director of property science, says: “A drop in asking prices is to be expected this month after a frenzied two years and many would-be home movers become distracted by the summer holidays.
“Indeed, for those that can, this may be their first summer holiday abroad since before the pandemic.
In London there’s a big variance of house price inflation, as on a monthly basis Barnet prices fell by -4.4%, while they rose by 1.3% in Islington.
Rightmove predicted annual price growth falling back to 7% by the end of the year, though there are fears rising food and fuel prices could push the UK into a recession.
At the start of the month the Bank of England made its sixth successive base rate rise to try and tackle inflation, bringing the base rate to 1.75%.
Experts predict that interest rates could hover around 2.5% by the year end.
Bannister added: “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.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The only surprise about these figures is that the drop in asking prices has taken so long to show up after we noticed a reduction in buyer and seller activity ‘on the ground’ a few months ago.
“Summer holidays are also proving a distraction with many decision makers taking advantage of the fine weather here and abroad.
“But the market is also baring its teeth and demonstrating familiar resilience. Lack of choice, low unemployment and increasing rents are continuing to support demand.
“Therefore, no significant change in property prices is expected at this stage despite increasing concerns about the rising cost of living and interest.”