The average price of property coming to the market for sale has seen a 1.5% increase this month, amounting to £5,279, bringing the average price to £368,118. This rise signals a continued recovery following a relatively muted performance in the market throughout 2023. Despite previous challenges, the current uptick suggests a more optimistic outlook for property sellers, with market conditions showing signs of improvement.
Furthermore, the positive start to the year is evidenced by heightened buyer demand, as indicated by an increase in inquiries sent to estate agents. Additionally, sales numbers are showing resilience, surpassing figures from the same period last year. These encouraging indicators suggest a strengthening market sentiment and a potentially robust year ahead for the property market.
The surge in market activity, buoyed by the usual optimism associated with the Spring season, has exerted upward pressure on property prices. This month, there has been a noteworthy increase of 1.5% in property prices, surpassing the average historic March increase of 1.0%. This marks the most substantial monthly rise in prices seen in the past 10 months. Despite this positive trend, it’s worth noting that average asking prices are still £4,776 below the peak observed in May 2023. Nonetheless, the heightened buyer activity indicates a growing recognition among potential buyers of a window of opportunity in the market.
The current momentum in the market reflects a more optimistic outlook compared to the previous year, particularly considering the cautious start to 2023. The increase in buyer activity at the beginning of this year, compared to the same period last year, underscores a shifting sentiment towards property investment. However, it’s essential to contextualize this uptick in activity within the broader market dynamics and previous trends, ensuring a balanced perspective on the evolving property landscape.
Rather than marking the onset of another market surge, current indications suggest that overall activity levels have reverted to more stable pre-pandemic patterns. However, the heightened mortgage interest rates have led to increased activity, primarily among buyers less sensitive to these elevated costs.
Tim Bannister, Rightmove’s Director of Property Science, notes, “The stronger price growth this March reflects increased seller confidence, with some possibly overly optimistic about buyer activity and affordability in their local market. Additionally, more sellers are recognizing the need to be flexible and realistic, given the continued strain on affordability caused by elevated interest rates.” This shift in seller mindset suggests a more nuanced understanding of market dynamics, with sellers becoming more attuned to the importance of negotiation and realistic pricing strategies.
Since the start of March, there has been a notable 13% increase in the number of sales agreed compared to the same period last year, indicating a trajectory towards surpassing the one million transactions recorded in 2023.
The surge in sales agreed is particularly prominent in the top-of-the-ladder segment, which is less sensitive to fluctuations in mortgage rates, boasting an 18% rise in agreed sales compared to the previous year. This segment’s heightened activity is also reflected in the increased engagement with estate agents compared to last year. Specifically, buyer demand for top-of-the-ladder properties in March has surged by 12%, outpacing the overall 8% increase across all property types.
Buyer demand in London has surged notably compared to the previous year, particularly for properties at the top end of the market. Factors such as the return to office work, wage growth, stable housing prices, and easing inflation have contributed to this renewed interest in living in the capital.
However, despite this promising start to the year, agents caution that the market remains sensitive to pricing dynamics and external factors. The average time to secure a buyer has stretched to 71 days, marking the lengthiest duration for this period since 2019. Agents note that competitively priced properties are swiftly attracting interest, while those priced higher are lingering on the market, prolonging the time to secure a buyer.
Additionally, the average 5-year mortgage rate has climbed to 4.84%, up from 4.64% just five weeks ago. This upward trend in mortgage rates continues to challenge buyer affordability, posing a significant consideration for those entering the market.
Buyer demand in London has surged notably compared to the previous year, particularly for properties at the top end of the market. Factors such as the return to office work, wage growth, stable housing prices, and easing inflation have contributed to this renewed interest in living in the capital.
However, despite this promising start to the year, agents caution that the market remains sensitive to pricing dynamics and external factors. The average time to secure a buyer has stretched to 71 days, marking the lengthiest duration for this period since 2019. Agents note that competitively priced properties are swiftly attracting interest, while those priced higher are lingering on the market, prolonging the time to secure a buyer.
Additionally, the average 5-year mortgage rate has climbed to 4.84%, up from 4.64% just five weeks ago. This upward trend in mortgage rates continues to challenge buyer affordability, posing a significant consideration for those entering the market.
Bannister 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.”
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