The UK property market showed signs of settling in August, although slow price growth and higher mortgage costs continued to shape conditions for buyers and sellers.
Nationwide reported that UK house prices increased by 0.2% in August. Prices were also 1.6% higher than a year earlier, with the average UK house price at £275,465.
Although prices continued to rise, the increase was small. Nationwide said uncertainty about the economy, interest rates and energy prices was still affecting the market. It also suggested that affordability could gradually improve as wages were growing faster than house prices, although higher mortgage rates may limit the benefit.
Zoopla’s report, published on 27 August, suggested that buyer interest was beginning to recover. Searches for homes were 7% higher than a year earlier, although the number of sales agreed was still 6% lower. There were also 5% more homes for sale, giving buyers a wider choice.
Zoopla also estimated that higher mortgage rates had reduced buyers’ purchasing power by around 9% since January.
Asking prices fell in August
The average asking price of a newly listed home fell by 2% in August, the largest August drop for eight years, according to Property Reporter.
Asking prices are not the same as final sale prices, but the fall suggests that some sellers were pricing their homes more competitively.
Buyer activity began to improve
The RICS survey found that buyer interest and agreed sales were still lower overall, but both had improved. Buyer enquiries recorded their strongest result since January, while agreed sales reached their best level since February. This suggests that the market remained quiet but was beginning to stabilise.
Property professionals were also more positive about future sales, expecting the market to remain steady in the coming months before activity increases over the next year.
House price trends continued to differ by region
RICS reported that the outlook for house prices in London was weaker than the national average. Its survey also recorded price rises in Northern Ireland and continued growth in the North West of England.
Zoopla’s earlier figures showed a similar divide. In the year to July, prices were down by 1% in London but up by 3.1% in the North West and 5.4% in Northern Ireland. Zoopla also found that prices were flat or falling across much of southern England.
This is why buyers and sellers should look at prices in their own area rather than relying only on national averages.
What does this mean for buyers?
A wider choice of properties and lower asking prices may create opportunities for buyers in some areas. However, local demand and the seller’s circumstances will affect how much room there is to negotiate.
If you are planning to buy:
- Work out your full budget, including legal fees, searches, surveys, Stamp Duty Land Tax or the equivalent property tax in your area, and moving costs.
- Get a mortgage agreement in principle before making an offer.
- Compare the property with similar homes recently sold in the area.
- Instruct a conveyancer early so the first legal checks can begin.
- Avoid offering more than you can comfortably afford.
What does this mean for sellers?
With buyers paying close attention to price, an unrealistic asking price could make a home harder to sell.
Sellers can also prepare for the legal process before accepting an offer. Finding documents such as guarantees, planning permissions and building regulations approvals or completion certificates early may help prevent delays. Leasehold sellers should request information from their freeholder or managing agent as soon as possible.
A market showing signs of stability
Overall, August’s figures point to a market that is becoming more stable, although affordability and local conditions will continue to shape individual moves. Preparing your finances and legal paperwork early can help you proceed with confidence.
