Better than expected market surprises many as buyers return

According to the latest Rightmove House Index the average new seller asking price is steady this month, rising by just £14 (+0.0%), indicating that more sellers are following their agents' advice to set the price appropriately the first time.

It's positive to see the returning purchasers are increasing, and the 2023 market started considerably better than many anticipated:

  •  11% more consumers have contacted agents in the previous two weeks than they did during the comparable period in 2019's more typical market. 

  • The number of sales agreed is now just 11% below 2019 levels, down from 15% below at the beginning of the year and 30% below following the mini-budget.

  • The average rate for a five-year fixed mortgage with a 15% down payment is currently 4.82%, down from 5.90% in October.

  • Despite the fact that there are 24% fewer properties available for sale overall than in 2019, there is more variety for buyers now than there was in 2018. This gives potential purchasers confidence for their upcoming relocation.

Surprisingly, the first-time buyer sector is recovering more quickly than the discretionary upper-end market, according to the most recent sales agreed-on numbers. This month, the average cost of new homes on the market increases by just £14 (or 0.0%) to £362,452. This is the smallest January-to-February gain in history, but the fact that prices have remained stable rather than declining as some had predicted may be a sign of things to come. 

However, new sellers have defied convention and kept prices static for the first time ever at this time of year rather than increasing them, reflecting the slower market conditions. 

Even though it is still very early in the year, the major figures for this month indicate that many purchasers are seeing reasons to continue forward with their purchases and have the confidence to re-enter a market that has so far outperformed many expectations. 

This demand is starting to materialise into sales. Considering the sharp spike in mortgage rates less than six months ago, this is a very remarkable turnaround. 

Even more shockingly, sales for first-time buyers are holding up the best and are just down 7% from last year. This indicates that even though the first-time buyer market has been hardest hit in terms of inquiries from prospective buyers, those who are in the market and able to move are motivated to agree to purchase, probably in part due to high and rising rents and a persistent desire to own their own home. 

Sales at the top-of-the-ladder sector, on the other hand, are down 16% in the first two weeks of February compared to the same period in 2019, a sign of hyper-local and sector inequalities.

After the tumultuous months immediately after the mini-budget, average mortgage rates have begun to trend lower. According to the most recent data, a borrower seeking a five-year fixed mortgage with a 15% down payment would now be looking at an average rate of 4.82%, down from 5.90% in October.

The availability of homes for purchase has decreased by 24% since 2019 even though there is still a general shortage of real estate for sale, which gives prospective movers more hope that they will be able to locate the ideal place for them. 

The number of homes that are currently on the market has increased by 48% compared to the record-low levels of last year, and this slower-paced, more varied market seems to be appealing to the vast majority of buyers who must arrange a mortgage and who frequently lost out to cash buyers in the frenzied best bid scenarios of recent years.

If you are looking for professional advice on how much your property could be worth on the current market, book a free valuation, or a no-obligation consultation with one of our property experts by clicking here >>> BOOK A VALUATION. Alternatively, you can also contact us at 020 7723 5645 or pop into one of our local Fraser & Co offices for a friendly chat.


House Price Index 

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