Prices usually fall in December due to seasonal factors, but this month’s drop is bigger than the previous 20-year average of 1.5% — which Rightmove attributes to more competitive sellers.

Rightmove also said that this fall is partly driven by more new sellers looking to price below the competition now that the pendulum has swung towards a buyers’ market.

New seller average asking prices end the year just 1.1% below a year ago, while sales agreed for the year to date in 2023’s more challenging market are only 13% lower than the same period in 2022.

Rightmove predicts that new seller asking prices will drop nationally by an average of 1% in 2024, with motivated sellers still needing to price below their local competition to secure a sale, as buyer affordability remains stretched.

Tim Bannister, director of property science at Rightmove, said: “Further price falls beyond the usual seasonal trends that we’d expect at this time of year signal that some new sellers are continuing to act on the advice of agents to price competitively. 

“We entered this year under a cloud of uncertainty, as the fallout from the Autumn mini-Budget filtered through to lower activity levels.

“High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is likely to carry into next year.

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“However, for now, there appears to be more calm and certainty heading into 2024, and the fall in asking prices highlights the market’s much-better-than-predicted resilience this year.”

Jeremy Leaf, north London estate agent and former RICS residential chairman, said: “These figures are not particularly surprising bearing in mind they reflect asking rather than sale prices and a degree of realism on the part of sellers who are reducing their aspirations if they really want to attract buyers.

“Asking prices are not values but often an agent’s aspirational starting point to marketing.

“Overall, sales agreed are down as transactions are inevitably taking longer bearing in mind weaker demand and higher base rates.

“However, recent reductions in mortgage rates, and inflation not rising quite as rapidly, has given the market a bit of a kick when needed.

“Looking forward, the Christmas period is likely to be quieter at least until Boxing day which is always a great time for attracting interest on the portals and although much interest is aspirational, we always find plenty of genuine interest too."

Tomer Aboody, director at MT Finance, concluded: “Market activity has been at a lower level than last year, with a reduced number of property transactions as interest rates continued to rise and buyers found it difficult to budget. 

“With many buyers sitting on their hands and waiting for the right opportunities to come along, sellers who are keen to sell have had to reduce their pricing in many instances.

“This trend will likely continue into the new year, although at a lower level potentially as mortgage rates become more affordable and we see an increase in the number of buyers, who will once again find themselves in competition.”