April market snapshot

"The beginning of the spring market has been a real turning point, after a difficult start to the year and following the turbulence of the last three months of 2022. Listing figures are comparable with last year, while viewing figures are down only slightly, which given the exceptional market of last year is quite remarkable"

Whilst national headlines bounce from one Building Society claiming house prices falling to another stating price increases, we report what our offices across Bristol are actually finding.

Available stock has now ‘normalised’ providing an increased choice for buyers and our new and existing sellers are listing their homes at more competitive prices. Both buyers and sellers have adapted and accepted the current economic and property market conditions. There are now more attractive fixed-rate mortgages available providing more confidence, and there has been a noticeable increase in sales activity.

Headlines

• Sales agreed numbers recover to be in line with the more normal pre-pandemic market of March 2019, and have also exceeded September 2022 levels

• The average price of property coming to market rises by 0.2% (+£890) this month nationally.

• Despite the economic headwinds, first-time-buyer type properties hit a new record price of £224,963 nationally, £278,392 in Bristol

• Faced with record rents, buying is still compelling for first-time buyers who are able to clear the mortgage and deposit hurdles

• The average first-time-buyer mortgage rate for a 5-year fixed, 15% deposit mortgage has now fallen to 4.46%, with the lowest rate for this mortgage type currently at 4.19%

Leading the recovery to pre-pandemic sales levels is the first-time-buyer sector (two-bedroom and fewer properties) with sales volumes in this sector now 4% higher than in March 2019. By contrast the sectors with larger homes, the second-stepper and top-of-the-ladder sectors, are still 4% and 3% behind 2019 respectively.

Economy

The UK economy remained static in February, the effects of strike action countering a rise in construction activity. In the three months to February, the ONS report the economy grew by 0.1%. At 10.1% in the year to March, the rate of inflation fell just 0.3% from February. Food prices continue to rise, while fuel prices have moderated. Inflation is predicted to fall over the course of 2023.

The Bank of England has raised the base rate of interest to 4.25%, its highest rate in 14 years, with expectations the rate will peak at 4.5% this year. 

Prices

Price moderation of 6.8% is expected for the housing market over the course of 2023/24 according to the latest official forecasts by the Office of Budget Responsibility. Price growth of over 19% was recorded for 2021-22. The average house price in January stood at £288,074, down 1.1% from the previous month, but up 6.3% from the same time a year ago (UK HPI, ONS).

Over the last 12 months, the average sales price in Bristol was £368,971. The total value of sales was £1,937,409,253. 33% of sales were flats, achieving an average sales price of £278,392. Flats availability remains strong with Ocean, further fueling the positive activity in the local property market. Houses achieved an average price of £424,561. 

Transactions

The number of sales agreed in March 2023 was just 1% lower than in March 2019 according to Rightmove. This represents the first time the volume of sales agreed has been back to its pre-pandemic level since September 2022. At +1 a net balance of agents expects sales growth in the next 12 months, the first time the RICS indicator has been positive since March 2022. Agents expect volumes to remain under pressure over the next three months.

Bristol - 43 days

Demand

Buyer demand for property has risen considerably since December. According to Propertymark, there were 94 prospective buyers registered per branch in February, compared to 70 in January and 39 in December.

At 43,536 mortgage approvals in February were 34% lower than the pre-pandemic (2015-2019) average but were 10% higher than January. Pre-pandemic approvals in February were usually slightly lower than in January.

Investment/lettings

Demand for rental properties is at a five-month high according to the latest survey by RICS. Demand continues to outpace supply with pressure on rental values continuing.
Annual growth in private rental prices in the UK rose to 4.9% in the year to March, with many regions of England and Wales experiencing the strongest growth since records began. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets.
The government is consulting on plans that would require homeowners to obtain planning permission before converting properties into short-term holiday lets in tourist locations. It is likely a rental period of between 30-90 days would be allowed before permission is required.

Comment

“Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt Spring buyers with a competitive price. The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace. Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choices available. However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.“ Tim Bannister Rightmove’s Director of Property Science

Tue 25 Apr 2023