Why have asking prices fallen for the first time in 2021?

If you’re considering moving home, we can let you know exactly what’s happening in the market right now.

Here at Rightmove, we track what’s happening with asking prices every month, from when sellers first list a property for sale, to when they find a buyer. So we can see if average asking prices are going up, or down, and we can also look at how many buyers are viewing and sending enquiries to estate agents.

Five key takeaways on the property market this month:

1. Asking prices have fallen for the first time in 2021 – why?

House prices have kept rising all year so far. However this month we’ve seen a drop of just over £1,000 from the average asking price of a home in Britain, which now stands at £337,371.

When asking prices fall, especially for the first time this year, it can “ring economy alarm bells”, says our property data expert Tim Bannister, so it’s important to dig underneath the headline figures.

2. Prices fall at the top end of the market

Our analysis shows that average prices have only fallen for larger homes, typically those with five bedrooms and more (houses and flats), and four-bedroom detached houses.

This is because both buyers and sellers of these homes have been impacted the most by the end of stamp duty savings from the start of July, which has also led to a slight drop in demand for bigger homes. And many people put off moving in the summer months, even if they’re holidaying closer to home this year.

3. Why are asking prices still rising across the rest of the market?

Average asking prices for properties aimed at second-steppers, (typically three- and four-bedroom houses and flats, excluding four bed
detached houses) and first-time buyers (houses and flats with two bedrooms and fewer) reached record highs again this month, as buyer demand remains strong.

Tim Bannister says this is because the stamp duty holiday wasn’t the biggest motivator them choosing to move, especially for buyers of lower-priced homes where the savings were not as big. We’re also seeing a jump in demand for these properties as buyers who had put their moving plans on hold during previous lockdown periods are now choosing to act.

“In England there remains a smaller stamp duty saving of up to £2,500, though the window to take advantage of this saving by buying now and completing by the end of September is pretty much closed,” he says.

Work out how much stamp duty you’ll pay: use our calculator

4. What’s the forecast for the rest of the year?

With record numbers of people still looking to move, we predict that there will be an autumn bounce, with more sellers listing properties for sale and strong buyer demand pushing up asking prices.

However, the number of properties for sale is still at a record low, with buyer demand hoovering up new supply. We’re seeing more properties selling, and quickly.

5. What does all this mean if I’m looking to move?

Thinking of selling?

Home-owners looking to move should act soon to get a better chance of a quick sale, at a good price, and to be in their new home before… yes, we’re going to say it – Christmas!

This is because the likelihood of sellers finding a buyer is close to an all-time high. Properties are selling at the fastest pace ever – within an average of 36 days. However, given the fierce competition to buy property, many sellers are choosing to have a buyer lined up, subject to contract, before entering the race to secure their own purchase.

“Selling before you buy puts home-owners in the best position to be at the front of the queue to buy suitable properties as soon as they come to market,” says Tim Bannister.

Toby Philips, Managing Director for Countrywide, agrees. He says: “The UK property market continues to defy expectation, with houses continuing to sell faster than ever. At Bairstow Eves, we’ve never seen a seller’s market quite like this. We would encourage anyone thinking of selling to take advantage of this window of opportunity, now.”

Looking to buy?

If you’re looking to buy a home, it’s more than likely you will be competing with other buyers because more people are looking to move than there are homes available to buy. Which means you’ll need to be ready to move fast. If you have a property to sell, contact your local estate agent now about getting it listed for sale on Rightmove. You’ll be in a much stronger position as a buyer if you are in the process of selling your home, or have already accepted an offer.

And make sure you sign up for our Instant Property Alerts, so you’ll be among the first to hear when a new property that matches your search criteria is listed on Rightmove.

Check out our top tips for buyers in a busy property market here.

You can check the average asking prices in your region on our map here, or view the full report: Rightmove House Price Index for August.

The header image for this article is provided courtesy of Carter Jonas, Harrogate.