The average asking price of a property coming to market in March lifted by 0.8% to £365,357, according to data from Rightmove, which it says points to “a stable” start to the spring buying season.
Asking prices are below the average rise in March of 1%, compared to the month before over the last 20 years, reflecting caution among new sellers, the House Price Index from the property website points out. Asking prices were flat in February.
It adds that the “exception to this caution” is a 1.2% monthly price jump in larger top-of-the-ladder homes, in contrast to more modest 0.4% and 0.5% rises in first-time buyer and second-stepper properties, respectively.
The survey says annual asking prices eased to 3% in March from 3.9% the month before, to £362,452.
It points out that new seller asking prices are now £5,800 below last October’s peak “as the market cautiously moves towards pre-pandemic activity levels despite economic turbulence.”
“The data continues to point to a market on a much more stable footing than many anticipated and cautiously transitioning towards the activity levels of the more normal market of 2019,” the study adds.
Rightmove director of property science Tim Bannister says: “The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022.
“The pace of the market reached an unsustainable level in the last two years, and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-Budget.
“While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season.”
MT Finance director Tomer Aboody , adds: ‘Some ‘normality’ is setting in after two years of unprecedented house price rises, which in turn were fuelled by the pandemic and rock-bottom mortgage rates, as volumes and numbers slowly return to pre-pandemic levels.
“It is interesting to see the higher end of the market is on the up showing that buyers are still there at all levels of the market, with price resetting making homes more affordable.
“Of course, with interest rates still to settle down after multiple hikes, there’s still some caution although a confidently delivered Budget has provided some confidence for the markets, with inflation on course to be reduced and rates accordingly set to fall in the next 12 months or so.”
Hargreaves Lansdown head of personal finance Sarah Coles points out: “Sellers are taking a punt on higher asking prices. They’re hoping falling mortgage rates and the spring selling season will support some fairly optimistic pricing – particularly at the pricier end of the market.
“Unfortunately, there are a few signs that some of this confidence may be misplaced, and that they may well need to do a deal to secure a sale.
“Asking prices remain pretty punchy, up 3% in a year. This has been driven by asking prices for larger properties – which are up 1.2% in a month.
“However, this end of the market isn’t shifting as fast as it did in the same period in 2019, or as fast as slightly smaller homes. It’s a reasonable indication that they may not quite achieve these prices.
“This is even more likely when you consider Zoopla’s findings that home sellers are cutting prices by an average of £14,100 – or 4.5% to shift their properties.”
Coles adds: “FTB property prices look more robust – with prices down just £500 from the peak, and the number of sales down 4% from the same period in 2019.
“However, with affordability so stretched in this corner of the market, an awful lot will depend on mortgage rates continuing to fall back – something which is far from guaranteed.
“On the flip side, there is some real hope to be gained from the fact that demand is now higher than just before the pandemic.
“Lower mortgage rates may well be persuading more people to dip their toe back into the property market, which in turn could mean price falls aren’t as brutal as had been expected.
“However, demand remains fragile, and given the uncertainty over the trajectory of the mortgage market, this is not a time to get carried away.”