Sales agreed numbers are 13% higher than last year,and demand is up 8% indicating a positive start to the year according to the figures from property portal Rightmove.
The property market exhibits a ‘blend of resilience and cautious optimism.’ The average price of newly marketed properties has risen by 1.5% this month, reaching £368,118. This upward trajectory, albeit tempered by past peaks, signifies a robust recovery following a subdued 2023. With buyer demand up, the market shows signs of vitality according to Tim Bannister Rightmove’s Director of Property Science:
“March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway. However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price. Despite the above average price increases in this opening three months of the year, asking prices are still £4,776 below their peak in May 2023.
For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy as we now seem to be past the bottom of the market. While some sellers are still being over-optimistic with their pricing expectations, there are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers.”
According to Twenty7tec over the past seven days there has been a ‘noticeable decline’ of 18.7% in total mortgage searches compared to four weeks ago. Buy-to-let mortgage searches follow suit, down by 13.2%, while purchase and remortgage searches register declines of 12.9% and 24.2%, respectively. These figures underscore a cautious approach among prospective buyers and homeowners, perhaps reflective of broader economic uncertainties suggests Nathan Reilly, Director at Twenty7tec:
“The market has fundamentally shifted over the past week or two. Lenders have adjusted their products based on underlying swaps prices, building in slower reductions in interest rates than were priced in at the back end of last year.
“The heat in the market was always going to be hard to sustain – the levels of mortgage searches in January and February set new records for our busiest ever times. But it seems that that early-year exuberance has now been swapped for sobriety in March. The market is keen to hear some good news in the next inflation update and BOE meeting. That mood music – which we saw directly influence a surge in activity earlier this year – will be so important when it comes to injecting confidence into the market.”
Meanwhile, Rightmove’s weekly mortgage tracker reveals the average 5-year fixed mortgage rate has increased to 4.84%, up from 4.61% a year ago. Similarly, the average 2-year fixed mortgage rate has climbed to 5.22%, up from 4.99% a year earlier. The recent Spring Budget’s lack of direct support for first-time buyers or mortgage market innovations has dampened some of the market’s momentum. As evidenced by Rightmove’s real-time data, the aftermath of the budget announcement witnessed a temporary pause in buyer interest, signalling the market’s sensitivity to external factors says the porta.
The steady rise in mortgage rates, now averaging 4.84% for a 5-year term, continues to test buyer affordability. Yet, amid these challenges, the property market demonstrates resilience, with strong sale numbers, setting the stage for a potentially robust year in transactions. Tim Bannister Rightmove’s Director of Property Science, adds
“It’s been a positive first three months of the year for the market and better than many anticipated. However, we know from last year how quickly the picture can change with some negative economic news or surprises, evidenced in Rightmove’s data which captured the immediate buyer reaction to the lack of major housing initiatives in the Spring Budget.
“Sellers are right to feel more confident and optimistic this year, but buyer affordability remains stretched and higher mortgage rates are an ongoing challenge. With the market still sensitive to pricing and external events, some caution and willingness to negotiate is advised for sellers who are keen to find a buyer in the Spring market.”
