UK house prices drop for first time this year, says Rightmove

theguardian.com:

UK house prices have fallen for the first time this year but experts say summer distractions rather than deteriorating economic conditions are to blame.

Figures released by Rightmove show that the average price of a UK property dropped to £365,173 in August, marking a 1.3%, or £4,795, decline.

While there are concerns that rising interest rates – increased in response to soaring inflation – could weigh on the housing market, Rightmove said the dip was broadly in line with summer price trends over the past decade and would probably recover once house hunters returned from holiday breaks, which for many were the first since Covid restrictions were lifted.

“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,” Tim Bannister, a Rightmove director, said.

Rightmove said sellers who need to move quickly tend to drop their prices in order to ensure they can close deals and move in by Christmas. That is partly because the average time to accept and complete a sale is now about four and a half months.

While a number of mortgage lenders, including Barclays, believe interest rates could creep towards 2.5% by the end of the year, resulting in higher costs for borrowers, those pressures are only expected to slow the pace of house price growth rather than reverse it.

Lloyds Banking Group, which owns Halifax and is the country’s largest mortgage lender, said last month that while it was bracing itself for a slowdown in property price growth and mortgage lending, its own rate of lending was still likely to grow by single digits over the next 12-18 months.

Rightmove said it still expects UK