New research shows that the market is showing “tentative green shoots” as we head towards spring, says Kris McLean, Managing Director of The Guild of Property Professionals.
Mclean notes that there has been a “welcome fall” in mortgage rates, with rates of below 4% for lower loan-to-value mortgages. He also states that the “typical costs of a two-year deal and five-year fixed-rate mortgage have fallen back to where they were in October 2022, despite the Bank of England Bank Rate rising by 1.75% during this period”.
“There has also been a rise in the number of mortgage products, with over 4,000 different products now available. According to Zoopla, the number of days a product is available before it is withdrawn has also increased. It is now at 28 days, which is up from just 15 days in January, the highest level since March 2022,” said Mclean.
He continues saying that the housing market and economy are closely interlinked, and despite the rising cost of living, the rate of inflation has slowed and is expected to fall back over the course of the year. Employment levels remain strong, GDP forecasts are improving, and any recession is expected to be less severe than first predicted.
Mclean said:
“Looking at property prices, after two years of unsustainable rises, an expected price moderation in 2023 is not a surprise. The latest figures from Nationwide show that national price growth has moderated from 11% in the summer of 2022 to -1.1% in February 2023. Across the regions, annual price growth at the end of December remained firmly in positive territory, but the start of 2023 has seen prices start to moderate. Rightmove report that at just £14, the rise in new seller asking prices in February was the smallest-ever increase from January to February, with month-on-month asking prices recording marginal falls in nearly half of all UK regions.”
He adds that the Bank of England announced that mortgage approvals in January had “fallen to their lowest level” since May 2020. Zoopla report that buyer demand is up 8% on the pre-pandemic years, while the latest survey of UK consumer confidence undertaken by GfK registered a “+7 uptick” in February.
“Over past two years the property sector experienced a wave of activity, however, the market is now stabilising and pausing for breath as stock levels and time taken to secure a sale are gradually returning to pre-pandemic levels. With buyers currently in the driving seat, sellers will have to show greater realism on price to get their sale across the line,” McLean added.
