Cautious recovery continues for the Spring market
The average price of property coming to market has risen by 0.8% or £2,906 in March according to the latest House Price Index report from Rightmove.
This average increase is due to a 1.2% jump in the largest homes section of the property ladder.
Although annual asking price growth is up by 3.0%, new seller asking prices have fallen on average £5,800 below October’s peak.
The market is now “cautiously” moving towards pre-pandemic activity levels despite current economic turbulence, according to the latest Index.
Other key stats from Rightmove include:
· Typical first-time buyer type properties (two-bedrooms and fewer) lead the recovery as we enter spring market.
· Average newly marketed prices for this type of home are now just £500 lower than their record last year.
· Sales agreed in this sector are unexpectedly recovering fastest, and in the last two weeks are just 4% behind the same period in the more normal market of 2019, though 18% behind the exceptional 2022.
· However, larger home sales are lagging behind as sales agreed in the last two weeks in the top-of-the-ladder sector are 10% behind the same period in 2019, and 13% behind in the second-stepper sector.
· Average mortgage rates have fallen back from their peak last year, with average rates for a 15% deposit five-year fixed mortgage now 4.65%, edging down from last month’s 4.75%, and October’s 5.89%, though this compares to 2.48% in March 2022.
· The average price of property coming to the market rises by 0.8% (+2,906) this month to £365,357. This is below the average monthly rise of 1.0% seen in March over the last 20 years, reflecting a higher degree of pricing caution by many new sellers than is usually seen at this time of year. The exception to this caution is a 1.2% monthly price jump in the larger home top-of-the-ladder sector, in contrast to more modest 0.4% and 0.5% respective rises in the first-time buyer and second-stepper sectors.
Russell Griffin, co-director at Samuel Wood, said that as we enter Spring, we are beginning to see more confidence in the market as it starts to stabilise and recover from the turbulence at the end of 2022.
“September’s mini-budget certainly accelerated the speed of this slowdown to a more level. Higher mortgage rates and economic headwinds have raised challenges. But many potential home movers who were side-lined in the frenetic bidding wars of the last two years should find that a more normal, slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season.”
Andrew Cadwallader added that given the rising cost of living and increased cost of taking out a mortgage, it is likely that many first-time buyers are getting some support from family or have been able to save up a larger deposit by living with parents for longer during this period and are now ready to make their first step onto the housing ladder.
“Accompanying the budget announcement, the OBR (Office for Budget Responsibility) statement that inflation is likely to reduce more quickly than previously forecast to 2.9% by the end of 2023 is positive news and the Bank of England may temper rate rises and reduce them more quickly than previously anticipated. However, market conditions are changeable, and we will need to see how the mortgage market reacts in the coming weeks.
“Sellers looking to take advantage of traditionally strong buyer interest during the spring moving season should seek the expertise of a local estate agent, who will have their finger on the pulse and be best placed to advise on their local market.”