Starting in November and leading up until the start of the new year, house prices tend to dip compared to the prior months.
For example, according to Rightmove’s House Price Index, house prices have on average dropped by over £4,000, which on a percentage rate is in line with other November price drops seen from 2015 until 2019, with 2020 and 2021 being especially strange, busy periods.
For estate agents in Leicester, the prices have remained relatively consistent, but given that it is a seasonal change, it is important to understand the factors that make house prices lower in winter in general, as well as look at how this may differ for the winter market in 2022.
Christmas is one of the main factors at work here, in no small part because people are less willing to move during the festive period due to the disruption it can cause, which leads homeowners to lower their prices to make them more competitive.
The market itself tends to be less competitive in winter, which means fewer homes and the buyers and sellers in that period tend to be more serious and considered, leading to more fervent negotiations.
It is also a time when a home does not really show its best side, with greater clarity on issues such as irrigation, lighting and potential repairs.
However, the housing market as it currently exists is in a state of flux compared to the market pre-2020, and there are reasons to believe that the typical ebbs and flows are unlikely to be repeated over the coming winter season.
The first is that since 2019, the Bank of England’s base rate has increased by 2.25 per cent, reaching its highest level in decades. This affects mortgage rates, which in turn affects the affordability of houses.
The late September fiscal event had a considerable effect on many cost pressures for prospective buyers, with inflation, mortgage rates and cost of living expenses all higher than they were at the start of 2022, which further affects affordability.
This has currently led to a drop in first-time buyer demand, and a normalisation of the market compared to the last few years. It remains to be seen if this is a sign of a long-term fall in the market or a more seasonal dip.
