9:15 AM, 20th March 2023, About 12 months ago
Optimistic home sellers are not being deterred by rising mortgage rates and a property market slowdown, Rightmove reports.
In its latest house price index, the platform says that average asking prices went up by 0.8%, or £2,906, in February.
And the annual rise in prices has eased to 3.0% – new seller asking prices are now £5,800 below October’s peak.
That’s because, Rightmove says, the market is cautiously moving back to pre-pandemic activity levels despite the economic turbulence.
The average price of a UK property is now £365,357.
Tim Bannister, Rightmove’s director of property science, said: “The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022.
“The pace of the market reached an unsustainable level in the last two years, and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-Budget.”
He added: “While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season.”
The data shows that typical first-time buyer type properties are now just £500 lower than their record last year and the number of sales agreed are unexpectedly recovering fastest.
In the last two weeks, they are just 4% behind the same period in the more normal market of 2019, though 18% behind the exceptional 2022 market.
However, larger home sales are lagging behind as sales agreed in the last two weeks are 10% behind the same period in 2019, and 13% behind in the second-stepper sector.
Sarah Coles, the head of personal finance at Hargreaves Lansdown, said: “Sellers are taking a punt on higher asking prices. They’re hoping falling mortgage rates and the spring selling season will support some fairly optimistic pricing – particularly at the pricier end of the market.
“Unfortunately, there are a few signs that some of this confidence may be misplaced, and that they may well need to do a deal to secure a sale.”
She added: “Asking prices remain pretty punchy, up 3% in a year. This has been driven by asking prices for larger properties – which are up 1.2% in a month.
“However, this end of the market isn’t shifting as fast as it did in the same period in 2019, or as fast as slightly smaller homes.
“It’s a reasonable indication that they may not quite achieve these prices.
“This is even more likely when you consider Zoopla’s findings that home sellers are cutting prices by an average of £14,100 – or 4.5% to shift their properties.”
Tomer Aboody, a director of property lender MT Finance, said: “Some ‘normality’ is setting in after two years of unprecedented house price rises, which in turn were fuelled by the pandemic and rock-bottom mortgage rates, as volumes and numbers slowly return to pre-pandemic levels.
“It is interesting to see the higher end of the market is on the up showing that buyers are still there at all levels of the market, with price resetting making homes more affordable.”
Jeremy Leaf, a north London estate agent and a former RICS residential chairman, said: “These numbers are interesting as they confirm what we’ve been seeing recently in other surveys, as well as on the ground.
“Although Rightmove’s statistics reflect asking, not selling, prices, the market is clearly demonstrating considerable resilience despite continuing worries about the cost of living and mortgage rates.”