House prices dropped for the first time in 2022 during August, the BBC reports. The average asking price is down by £4,795 according to the latest figures from property portal Rightmove. This represents a fall of 1.3% from July. However, the drop was widely predicted, and experts are playing down fears of a property market crash.
August is traditionally a time of a seasonal lull in the property market, as many people are on holiday. There has also been an artificial spike in activity for the past two years, caused by the stamp duty holiday, and people reassessing their lifestyles after the pandemic.
Tim Bannister, Rightmove’s director of property science, 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.”
He added: “For those looking to move who are concerned about interest rate rises, it’s important that they get a mortgage in principle early on in their moving journey to understand what they could afford to borrow, and find out about the rates available to them to assess what they are able to repay each month.”
Inflation is predicted to rise even further from its recent 40 year high this autumn, topping out at 13.3% in October. Interest rates are also expected to rise once more, up from the current rate of 1.75%, which will mean higher monthly repayments on new mortgage deals.
Although average wages have risen by 4.7% over the summer this is still below the sharp rise in the cost of living, and represents a ‘real value’ drop of 3%. However, property prices are still expected to see an overall growth of 7% by the end of 2022.
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