House prices edge lower - Rightmove

House prices edged lower in June, an industry survey showed on Monday, the first monthly drop so far this year.

According to the latest Rightmove house price index, the average new seller asking price dipped £82 to £372,812 in June. That compare to May’s 1.8% increase.

Year-on-year, prices were 1.1% higher.

Rightmove said the small downward move - the first fall in June since 2017 - indicated that the usual summer slowdown had started earlier than usual, following a delayed bounce in activity in spring. Over the last decade, on average asking prices rose 0.6% in June.

The survey showed buyer demand had held steady during the month, up 6% on the same period in 2019, despite the recent hikes in mortgage rates.

But the number of agreed sales slipped, and in the last fortnight was 6% below the same period in 2019. In May, it was 3% lower.

Tim Bannister, director of property science at Rightmove, said: "Asking new seller prices, the first and leading indicator of new trends in the market, have dropped slightly this month.

"We expect prices to edge down during the second half of the year, which is the normal seasonal pattern, [and] current trends suggest our forecast for a 2% annual drop in asking prices at the end of 2023 is still valid."

The Bank of England has now raised the cost of borrowing 12 times in the last 18 months, to 4.5%, but analysts expect further rises, to at least 5.5%, by the end of the year.

Mortgage rates, which surged last autumn in response to the government’s disastrous mini budget, had ease earlier in the year. But they are now moving steeply higher once again, primarily in response to stubbornly high inflation.

Bannister said: "It is likely to feel very frenetic for those taking out a mortgage right now, as they try to quickly lock in the best rate that they can find.

"Although the impact of higher mortgage rates on activity levels has been limited so far, with prospective buyers who can still afford to move appearing determined to go ahead, it remains to be seen how movers will respond to the expected further rate rises."