The average asking price for properties coming to the market rose by 0.8% in March to £365,357, according to the latest Rightmove House Price Index.
Despite being £5,800 below October’s peak, the data reveals that mortgage rate hikes and the subsequent property market crunch have not deterred optimistic home sellers.
Over the past year, the average asking price for newly-listed homes has increased by 3%, a £2,906 hike, in spite of the economic squeeze.
Tim Bannister, Rightmove’s director of property science, explained: “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.”
Bannister added: “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 believes that despite higher mortgage rates and economic challenges, many potential home movers who were sidelined during the bidding wars of the past two years will benefit from the slower-paced market during the traditionally busy spring buying season.
Rightmove reported that buyer demand was 6% higher than in the same period in 2019.
First-time buyer properties are also recovering, with prices just £500 lower than their record last year, and the number of sales agreed only 4% below the last comparable period in 2019.
However, signs of tenants being priced out of major cities are emerging as rental prices rise and cost of living pressures continue.
Rightmove found that rental prices listed by landlords have increased by 12% in a year, with tenant demand remaining high.
Reaction
Tomer Aboody, director of property lender MT Finance:
“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.
“Of course, with interest rates still to settle down after multiple hikes, there’s still some caution although a confidently delivered Budget has provided some confidence for the markets, with inflation on course to be reduced and rates accordingly set to fall in the next 12 months or so.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“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.
“Property is price sensitive and activity patchy but stock levels are improving. For instance, we’re still receiving several offers on some properties – particularly family houses where shortages remain – but little or no interest in others. Encouragingly too, we’ve noticed first-time buyers making a comeback after almost writing them off as an endangered species at the end of last year.
“Looking forward, buyers and sellers are beginning to shrug off the more damaging economic effects of last September’s mini-Budget so we’re looking forward to a busier spring than we dared hope for in the early weeks of 2023.”
