New data has revealed that sales agreed numbers have recovered to be in line with the more normal pre-pandemic market of March 2019.
According to Rightmove, one of the dips in the market was the fallout from the mini-Budget towards the end of September, with sales agreed initially plunging by 21% the following month as mortgage interest rates rapidly accelerated.
Further highlighting the recovery, monthly sales agreed volumes are now higher than in September for the first time since the mini-Budget took place.
However, sales agreed are still 18% behind last year’s exceptional market as a transition to a more normal level of sales activity takes place.
Leading the recovery to pre-pandemic sales levels is the first-time-buyer sector (two-bedroom and fewer properties) with sales volumes in this sector now 4% higher than in March 2019. By contrast, the sectors with larger homes, the second-stepper and top-of-the-ladder sectors, are still 4% and 3% behind 2019 respectively.
First-time-buyer type properties have reached a new record price of £224,963 this month, which may appear surprising given the economic headwinds that have made taking out a mortgage more expensive and saving up for a deposit even more challenging.
However, solid buyer demand in this sector which is now 11% higher than in the same period in 2019, illustrates the continued strong desire from would-be first-time buyers to own their own homes.
Tim Bannister, Rightmove’s Director of Property Science, commented:
“The first-time-buyer sector typically accounts for over a third of all sales which are often the start of chains, so these positive sales agreed figures are good for the health of the whole market.
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.”
Also, the new seller asking prices rose by just 0.2% (+£890) this month to £366,247, which is notably lower than the average increase of 1.2% for this time of year.
This unseasonal pricing restraint is a sign that many new sellers are taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels, last seen in the pre-pandemic market of 2019.
Agreed sales volumes are now just 1% behind March 2019 with the strength of the improvement since the start of the year defying the expectations of many.
This comes as Nathan Emerson, CEO of Propertymark, revealed earlier last week that “the increase in sellers joining the market shows us that trust is still there”.
Emerson added:
“Buyer affordability has stabilised, and it’s hoped by professionals that interest rates will stay steady throughout 2023. Prices are holding firm with a little negotiation back on the table meaning both sellers and buyers feel they are getting their monies worth.”
