Average asking prices were up just £14 between January and February standing at £362,452, the latest house price index from Rightmove has revealed.
Over the year, asking prices are up 3.9%, down from 6.3% up last month. But encouragingly buyer numbers are up 11%.
The number of sales agreed continues to rebound, and is now just 11% down on 2019’s levels, recovering from 15% down at the start of the year, and 30% down in the aftermath of the mini-Budget.
Average rates for a 15% deposit 5-year fixed mortgage are now 4.82%, down from October’s 5.90%.
While there is still an overall shortage of property for sale, down by 24% compared to 2019, there is more choice for buyers than a year ago, giving prospective buyers confidence for their onward move.
The latest sales agreed figures show that surprisingly it is the first-time buyer sector that is recovering better than the discretionary upper-end sector.
“The big question this month was whether we would see new sellers increasing their asking prices as has been the yearly norm as we approach the spring selling season.
“This month’s flat average asking price indicates that many sellers are breaking with tradition and showing unseasonal initial pricing restraint.
“In addition to market conditions demanding greater realism on price, we are transitioning into a slower-paced market, where buyers will take longer to find the right property at the right price due to the higher cost of servicing a mortgage.
“There are other indicators that this will be a softer rather than a hard transition despite the turbulence at the end of 2022.
“Homeowners who are coming to market in the upcoming spring season should use their agent’s expertise and get the price right the first time, which can really help to find the right buyer more quickly.”
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Sarah Coles, head of personal finance, Hargreaves Lansdown:
“Realism has engulfed the property market, but pessimism is being kept at bay by lower mortgage rates.
“Sellers are keeping a lid on asking prices. Usually at this time of year they’re gearing up for the spring selling season with punchy pricing. This year they’re well aware that over-pricing at this stage will mean they could miss out on the spring rush, and face cutting their prices as the market slows in the summer.
“Meanwhile, the number of people getting in touch with estate agents has risen, as falling mortgage rates are convincing more of them that it might be time to dip their toe back into the market. According to Moneyfacts, the average two-year rate is 5.32%, and the average five-year rate is 5.03%, and you can now get a five-year deal below 4%. It has been enough to stimulate more demand.
“However, we shouldn’t get too carried away by this trend, because the number of buyers agreeing a sale are still down from the same period in 2019. There’s a good chance that mortgages are still holding the market up.
“Buyers know rates are on the way down, and they’re not in a hurry to fix their rate any higher than they need to.
“The problem for the market is that if everyone holds off for just a few months, buyers may be forced to cut their asking prices to get a sale over the line, which could mean prices fall despite mortgage rates coming off the boil.”
Angela Hesketh, director of conveyancing transformation at Smoove:
“Rising demand from prospective buyers and the pick-up in number of agreed sales are both encouraging signs of confidence returning to the market after a tumultuous end to 2022. Of particular note are the resilient sales numbers from first-time buyers, suggesting a strong drive among this group to move forward with purchases despite the tough economic environment.
“Static new seller asking prices though do indicate the arrival of more conservative market conditions after the surging house prices of the pandemic years. While sellers will likely need to continue to adapt their pricing expectations, the transition to a slower market is set to be far softer than many would have anticipated late last year.”
