Housing market shows signs of ‘green roots’

As Spring approaches, one organisation says that the housing market is showing signs of ‘green roots’.

The Guild of Property Professionals says that despite the continuing cost-of-living crisis, other economic factors are improving and any possible recession appears to be less severe than was predicted.

Also, housing supply is returning to more normal levels and is up 60% compared to a year ago.

In addition, there is more choice for prospective purchasers with Zoopla reporting the average discount to asking price is currently 4.5%.

Price growth in the rental sector

According to the Guild, price growth in the rental sector is expected to continue this year with Rightmove revealing that competition between renters for available properties has dropped by 6% compared to 2022, and a third compared with September’s peak.

However, the imbalance between rental supply and demand remains high with the number of available homes to rent in the final quarter of 2022 up 13%, while new-to-the-market properties are up 5%.

Kris McLean, the managing director of The Guild of Property Professionals, said: “Over the past two years the property sector experienced a wave of activity, however the market is now stabilising and pausing for breath as stock levels and the time taken to secure a sale are gradually returning to pre-pandemic levels.

“With buyers currently in the driving seat, sellers will have to show greater realism on price to get their sale across the line.”

Falling mortgage rates

With mortgage rates falling back to their October 2022 levels, Mr McLean said: “Typical costs of a two-year deal and five-year fixed-rate mortgage have fallen back to where they were in October 2022, despite the Bank of England Rate rising by 1.75% during this period.

“There has been a rise in the number of mortgage products, with over 4,000 different products now available.”

He added: “According to Zoopla, the number of days a product is available before it is withdrawn has also increased. It is now at 28 days, which is up from just 15 days in January, the highest level since March 2022.”

Zoopla report that buyer demand is up 8% on the pre-pandemic years, while the latest survey of UK consumer confidence undertaken by market research company Growth from Knowledge (Gfk) registered a +7 uptick in February. This represents the largest monthly improvement in nearly two years.