Data from property portal Rightmove has revealed sales agreed have all but returned to pre-pandemic levels for the first time since September’s mini-budget.
Specifically, the number of sales being agreed now stands just 1% behind March 2019. Rightmove say this recovery is being driven by sales of flats which are now 10% higher than March 2019 having been 11% down at the start of the year.
The total number of agreed sales has improved from being 21% behind 2019 at the start of the year. The recovery has been strongest in London, with agreed sales now 11% higher than March 2019, while sales are taking longest to catch up in the East Midlands which is still 11% below 2019.
Agreed sales across the country are, however, still 18% below the “exceptionally busy” market of this time last year, said Rightmove.
This comes as average mortgage rates have been reduced somewhat: a 5-year fixed, 15% deposit mortgage now sits at 4.63%, down from 5.89% in October.
“The market is remaining surprisingly robust given the economic headwinds that have affected movers over the last six months,” said Rightmove’s property expert Tim Bannister, adding: “While the market is by no means at the exceptional level it has been over the last couple of years, it is a positive sign.”
Despite this, Rightmove’s data can be contrasted RICS’ Residential Market Survey for March 2023 which reported indicators for demand, sales, new listings, and house prices all remaining negative.
In terms of agreed sales, the national net balance slipped to -31% this month, down from a figure of -25% for February – though still less negative than the recent low of -43% reported in October 2022.
Near-term expectations point to sales remaining under pressure over the next few months, returning a net balance of -29%. At the twelve-month time horizon, the net balance for sales expectations came in at +1%, representing the first time this measure has been out of negative territory since March 2022.
As for demand, -29% of contributors reported a fall in new buyer enquiries during March – nearly unchanged from a reading of -30% last month. “When disaggregated, the downturn in buyer demand remains widespread across the UK, with virtually all regions and the four nations posting a negative reading in the latest returns,” said RICS.
RICS added that near-term expectations suggest this pattern “will remain in place for a while longer amid the tighter lending environment”.
That said, the twelve-month view on sales volumes has improved in the latest feedback, with respondents anticipating a more stable trend emerging.
Simon Rubinsohn, RICS Chief Economist, commented:
“The overall tone of the feedback received from respondents to the latest RICS Residential Market Survey is still one of caution towards the sales market, which is reflected in both the headline price and activity indicators. Deals are being done, but a theme coming through in the anecdotal remarks is the need for vendors to recognise the shift in market dynamics. Significantly, there is also a sense that the medium-term outlook is looking a little more settled, helped by the perception that the interest rate cycle may be near the peak.”
Another reading is offered by TwentyEA, who said while volumes of sales agreed have fallen by 18.4% in the last year, demand is only 7.8% lower than pre-pandemic 2019. They also noted that volumes of new instructions in 2023 to date are broadly similar to 2022 – a 2.6% increase. However, supply is still 7.7% lower than the pre-pandemic years of 2019 and 2020.
Stuart Ducker, Strategic Solutions Director of TwentyEA said:
“The market is clearly returning to a pre-pandemic normal where in both 2019 and 2023, we have seen demand as a percentage of supply at 68%.
When looking at March 2023 in isolation, demand versus supply was 72% in 2023 versus 70% in 2019, so relative to supply, demand levels are stronger than they were the pre-pandemic.
