More than a third of homes for sale have had at least one price reduction – the highest proportion recorded in more than a decade, according to a leading property website.
The average size of the reduction is also the biggest since January 2011 at 6.2%, Rightmove said.
When applied to the average asking price of £366,281 in September, this equates to a typical cut of £22,709.
The property portal said the figures suggested some sellers were too optimistic about their initial asking prices and have had to make some larger than usual adjustments.
This has worked to push up the cost of borrowing, including for mortgages.
And an additional hike, though possibly the lastis predicted this week.
However, Rightmove said there are signs that activity in the housing market is starting to pick up, with the number of new properties coming on the market up 12% in the first week of September compared to the average weekly volume in August.
Rightmove’s Tim Bannister said: “It has been a slower than normal August so all eyes will be on market activity over the next few weeks which will set the trend for the rest of the year.
“The combination of 14 consecutive rate hikes by the Bank of England, and many buyers and sellers still catching up on lost pandemic holidays, has contributed to a larger-than-expected summer break, although we still expect an autumn recovery.”
Bannister added: “Lots of sales are being agreed for properties priced at the right level and those that are selling are still taking five days less than at this point in 2019.
“We are also seeing foreclosures decrease as market conditions and mortgage rates stabilize.”
Andy McHugo, director at McHugo Homes in Birmingham, said: “In almost 20 years of selling homes I feel this summer and last summer have been the most subdued, perhaps due to the impact of not being able to travel in the summers in 2020 and 2021, but of course also with the current economic background.
“It is encouraging that since the start of September we have seen an upturn in inquiries as more homeowners have been motivated to enter the market, which should help translate into sales in the coming weeks and months. “
If the base rate peaks this week at 5.5% from a starting point of 0.1%, it will be among the largest of the so-called tightening cycles of the past 100 years, second only to increases that took place in the late 1980s ‘s and in the early and late 1970s.
Recession accompanied all these prior sharp rate hikes, and a downturn will increasingly loom large on the mind of the Bank’s monetary policy committee, with the 14 rate hikes it has already made yet to fully feed through to the real economy.
Data between now and Thursday’s announcement could still weigh on the outcome, with inflation figures for August due on Wednesday likely to buck the downward trend thanks to rising gasoline prices.
While the rate of price increase has gradually declined from its peak of 11.1% in October last year – to 6.8% in the year to July – it remains high.