Hints of an “autumn bounce” were seen in the housing market in September, as the average price tag on a home increased month on month for the first time since May, according to a property website.
The average price of a home coming on the market increased by 0.7% or £2,441 month on month in September, Rightmove said.
Across Britain, the average price tag on a home in September is £367,440, it added.
This September’s asking price bounce is bigger than the average for the month over the past 10 years, at 0.5%.
September is traditionally a busier period for the housing market as people return from summer holidays, Rightmove said.
It added that heatwaves and the World Cup also created conditions for a particularly quiet summer this year, giving some potential scope for a bigger rebound.
But typical prices remain 0.8% below a year earlier, and 2.3% lower than the start of the summer.
Rightmove also said it is a challenging and crowded market for sellers, with the number of homes available on the market for sale at a 12-year high for the time of year and buyer affordability still stretched.
The Bank of England kept interest rates unchanged at 3.75% last week – but average fixed mortgage rates have still been increasing in recent weeks amid rises in swap rates, which are used to price mortgages.
Finance experts said last week that fixed mortgage rates are influenced by financial markets’ expectations for what will happen, adding that home buyers are expected to be cautious and price-sensitive in the months ahead.
Rightmove said buyer demand is below this time last year as buyers grapple with affordability challenges.
Colleen Babcock, property expert at Rightmove, said: “Property prices have largely underperformed against the long-term average this year, but September is an exception.
“While buyers and sellers are returning to the market after the summer holidays to potentially fuel an autumn bounce, sellers face stiff competition from a 12-year high number of other homes for sale.
“With a large crowd of sellers chasing a smaller number of buyers, realism on pricing or a high-quality finish are absolutely key to attracting a buyer and making a sale.”
Rightmove’s analysis indicated that a home for sale typically has around a six in 10 (61%) chance of finding a buyer – but this varies significantly across Britain.
In Scotland, nine in 10 (91%) homes for sale are finding a buyer, which is partly due to Scotland’s buying and selling practices, the website said.
In the North West of England, 71% of homes are finding a buyer, compared with 56% in the South East and 42% in London, the analysis indicated.
Rightmove’s analysis also indicated that 74% of homes sold so far this year were priced right first time and did not need a later asking price reduction.
Ms Babcock added: “It’s encouraging to see more buyers returning to the market as we move into autumn, with activity picking up as usual after a subdued summer.
“Whilst almost two-thirds of homes are still successfully finding a buyer, the chances of selling vary significantly depending on where you live.
“Over 90% of homes that come to market for sale are selling in Scotland versus less than half in London, meaning those who want to sell will have to set their pricing according to local market conditions.
“Buyers continue to have plenty of choice and mortgage rates are increasing, so competitive pricing is still the biggest factor in attracting interest and securing a sale.
“Sellers who get the initial asking price right are giving themselves the best chance of standing out in a crowded market.”
Matt Smith, a mortgage expert at Rightmove, said: “This month’s traditional uplift in buyer activity shows there’s still a strong underlying desire to move, but volatility in mortgage rates remains a significant challenge for many.
“Mortgage rates have risen again over the past month, adding further pressure to monthly budgets, and the uncertainty over what may happen to rates in the medium term is likely holding back some potential movers.”
Kevin James, managing director at Bradleys Estate Agents in the south west of England, said: “The summer months delivered better activity than expected in our areas, particularly for sellers who adapted their expectations to the affordability pressures in the market, and listened to advice to price realistically.
“As families now return from their holidays and the new school year begins, we’re seeing the traditional autumn uplift in demand.”
Marc von Grundherr, director of Benham and Reeves, said: “Pricing correctly from day one is absolutely vital, particularly in London where buyers have a huge amount of choice and very little patience for homes that look over-ambitious on price.
“That can sometimes mean having a difficult conversation with a seller at the outset, but an experienced agent should be prepared to have it.
“Launch too high and you risk wasting the strongest period of buyer interest, only to reduce later once the property has already started to look stale.
“Price is only part of the equation.
“Presentation matters, flexibility around viewings matters and, above all, sellers need to listen to the feedback the market is giving them.”
This article was written by Vicky Shaw and Press Association Personal Finance Correspondent from Press Association and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.