Asking prices for property being put on sale in Britain over the past month increased less than normal for the time of year, the latest data from Rightmove shows.
The property portal said that average asking prices were up by 0.2% over the month, less than the average 1.2% gain seen at this time of year. Compared with a year earlier, asking prices were 1.7% higher, down from a 3% annual increase a month earlier.
Tom Bill, head of UK residential research at Knight Frank commented: “The steep drop in property sales that followed the shock of the mini-Budget has bottomed out. The mortgage market has stabilised and buyers increasingly accept they are in a new lending landscape after 14 years of ultra-low rates. Buoyed by savings accumulated during the pandemic, record levels of housing equity and a strong jobs market, activity has been solid this year at all price points. The further we get from the mini-Budget, the stronger the market is performing. That said, homeowners will experience more financial pain as they roll off historical fixed-rate deals and UK prices should fall by a few percent this year.”
Tomer Aboody, director of property lender MT Finance, commented: “High rents are persuading first-time buyers to take the plunge and commit to a property purchase. They are taking advantage of lower mortgage rates in recent weeks, as well as lenders prepared to lend at higher loan-to-values. The outcome is mortgage payments which are cheaper than renting, resulting in a sensible move in the longer term.
“There may be fewer buyers out there but sellers serious about selling are pricing realistically and subsequently are able to find a buyer.
“Regional areas are performing well due to lower pricing and better affordability than more urban areas, as many buyers still have less need to be centrally based as they continue to work from home either full time, or at least some of the time.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “Sales agreed may be down but asking prices are holding up. However, what we are seeing in our offices is that when it comes to the crunch those buyers who are either equity-rich or who have a ready-to-go mortgage are negotiating hard in order to get what they want. First-time buyers in particular are seizing the opportunity in increasing numbers to flex their muscles and get the best deals they can, in order to escape inexorably rising rents.
“Encouragingly, lenders seem increasingly confident that the market will not suffer a serious correction as we are hearing there are far more high loan-to-value mortgages available, suggesting that they don’t foresee a market collapse. Activity is slowly improving as we get more into the spring market but buyer caution about the cost of living means they are taking their time before taking the plunge. Therefore sales are taking longer and sales agreed numbers are close to where they were just before the pandemic hit.”
Adam Feather, head of Robert Anthony Estate Agents, said: “This month, we have so far seen a notable uplift in viewings and a slight drop in withdrawals. This suggests that buyers who are entering the market are more serious about securing a property. Market conditions are certainly improving as we enter the spring market.”