Rightmove is anticipating a 1% average drop in national asking prices by the end of next year.
The latest forecasts from the portal suggests motivated sellers are likely to have to price more competitively to secure a buyer in 2024 and agents will work even harder to build chains.
It predicts that mortgage rates will settle but remain elevated, tempering some buyers’ budgets, especially in the lower and middle market sectors.
Rightmove predicted average new seller asking prices would drop by 2% in 2023, and they are currently 1.3% lower year-on-year.
The property website said the average time for a seller to find a buyer has jumped from 45 days this time last year to 66 days now, with those sellers who have been competitive on price able to find a buyer more quickly.
It expects those sellers who have a more pressing need to attract a buyer will continue to price below their competition into 2024, and to be joined by sellers who have taken longer to adjust to the softer market conditions and belatedly get up to speed.
The level of price reductions has increased during 2023, with 39% of properties now seeing a price reduction during marketing compared to 29% last year, and 34% in 2019, according to Rightmove.
Buyers are much more likely to see a choice of homes for sale in their area that suits their needs compared to the stock-starved pandemic years, Rightmove suggests.
It claims buyers coming to market in 2024 are in a strong position to negotiate on price and take more time to choose the home that’s right for them.
However, the number of available homes for sale has only just increased to pre-pandemic levels and there are no signs of a wave of new listings which would create a glut of homes for sale. With more choice and fewer buyers on the ground, it will be those sellers who are willing and able to price temptingly who will attract buyer’s attention, the portal added.
Rightmove’s property expert Tim Bannister said: “This year has been better than many predicted, with no significant signs of forced sellers, lower than expected price falls, and good buyer demand for the right-priced quality properties. However, it has been a challenging change in mindset for some sellers to transition from the frenzied market of the previous few years.
“The level of sales being agreed is 10% lower than at this time in the more normal market of 2019, so sellers will need to price even more competitively next year to make sure that they secure a buyer.
“We predict a modest average fall of 1% in new seller asking prices next year. This will be felt more keenly in some areas of Great Britain than others. The housing market is made up of thousands of local markets, each with their own unique dynamic of supply and demand. In areas with more discretionary sellers and fewer homes for sale, we may see new seller asking prices remain flat, or even very slightly increase compared to this year.
“In areas where sellers are struggling to attract affordability-stretched buyers or needing to sell quickly due to a change of circumstance, new job opportunity, or strong desire for a lifestyle change, we are likely to see even more competitive pricing.
“An average drop of 1% in prices reflects our prediction that it’s likely to be another muted, and in parts challenging, year for some buyers and sellers in 2024. However, the better than anticipated activity this year has shown that many buyers are still getting on with satisfying their housing needs, and there is considerable opportunity for sellers and their agents to attract these buyers with the right pricing and marketing strategy. This underlying level of good demand at the right price makes it unlikely that we will see a more significant drop in prices next year.”