London asking prices fell by 1.5 per cent this month, bringing the average price of a home in the capital to £673,200, according to the latest data from Rightmove.
The property portal also found it now takes an average of 63 days for someone to sell.
Worryingly for anyone with their house on the market, price reductions are creeping up to a level not seen since January 2011.
This month, a whopping 36.3 per cent of properties currently for sale have had a price reduction, with an average discount of £22,700 nationally or 6.2 per cent, suggesting buyers are in a strong position to negotiate.
Rightmove said one reason for this is that many sellers had priced too high at first but were now heeding their estate agent’s advice and pricing appropriately.
There were signs of green shoots however: the number of properties coming onto the market in the first week of September jumped by 12 per cent across the UK when compared to the average in August, as children went back to school and people returned from their summer holidays.
While the number of sales agreed in August 2023 was down 18 per cent on August 2022, the sector’s crucial first-time buyers, who purchase homes with two bedrooms or fewer, was the best performing sector and only down 13 per cent compared to 2019.
Estate agents, buyers and sellers will all be looking to see what happens to interest rates over the next few weeks and there is reason to be hopeful. The average five-year fixed mortgage is now at 5.67 per cent, the seventh consecutive week of these rates dropping, after peaking at 6.11 per cent in July.
“It’s been a slower than usual August, so all eyes will be on market activity over the next few weeks, which will set the trend for the rest of the year.
“The combination of 14 consecutive Bank of England interest rate rises and many buyers and sellers still catching up on lost pandemic holidays has contributed to a bigger than expected summer lull, though we still anticipate an autumn bounce,” says Tim Bannister Rightmove’s Director of Property Science.
“Market conditions still vary considerably in different locations, and so a local estate agent will be best placed to advise sellers to give them the best chance of finding a buyer this autumn.”
London’s rising and falling boroughs
The story across London was mixed. The top performing borough was Richmond upon Thames, where average house prices rose by three per cent annually but were down 0.2 per cent in the last month to £936,460.
Haringey posted a 2.1 per cent year-on-year increase to £683,583, closely followed by Southwark, whose annual house price has increased to £665,321, a two per cent annual increase.
At the other end of the scale, Merton saw the biggest monthly and annual price drops. In August, house prices fell 4.3 per cent to £690,300, an annual reduction of 6.7 per cent.
This was significantly more than the capital’s second faller, Lewisham, whose prices fell 0.7 per cent monthly and 2.9 per cent annually to £508,533.
In Redbridge, prices stayed the same this month, but the borough dipped annually by 2.3 per cent to £512,510.