According to the latest House Price Index by Rightmove, new seller asking prices have risen by just 0.2% in April to £366,247, which is lower than the average increase of 1.2% for this time of year, indicating that many new sellers are taking note of economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels. However, asking prices for typical first-time buyer homes – two bedrooms and fewer – have increased by 2% annually to a record high of £224,963. The level of sales agreed is still 18% behind last year’s “exceptional market,” but just 1% behind March 2019. The first-time-buyer sector leads this recovery, with agreed sales now 4% higher than in March 2019, while the second-stepper sector remains 4% behind, and the top-of-the-ladder sector 3% behind. The average stock per agent has also increased from 43 to 45, while the time to secure a buyer dropped during March from 57 to 55 days.
According to Rightmove’s Director of Property Science, Tim Bannister, more competition among lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move. However, it remains a challenging environment to get onto the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago. The current “multi-speed market” is highlighted by sales of larger homes continuing to lag behind, with some sellers in the upper sectors likely needing to show a greater degree of pricing restraint to attract buyers in this much more price-sensitive market.
Research by Savills shows commitment to move among buyers has returned to levels not seen since February 2022. The agent’s latest survey of prospective prime property buyers and sellers shows 60% of purchasers now say that recent interest rate rises and the increased cost of living is having no effect on their budget and source of funding, up from 54% in August 2022. Commitment among prime buyers and sellers has improved significantly in both the short and long term, according to Savills. A net balance of +28% have said that they are looking to move in the next three-to-six-months, up from a net +7% in November 2022.
