February market snapshot
Well, once again the tabloid headlines were, well let's say misleading. No, house prices have not crashed, and the property market hasn't ground to a halt. But we are seeing a levelling off, and that is not necessarily a bad thing.
Sellers are becoming more realistic on pricing for today's market, and that is attracting more buyers, and in turn, boosting activity levels. Average new asking prices remain flat this month, rising by just £14 (0.0%), a sign that more sellers are heeding their estate agents’ advice to price right the first time, according to Rightmove.
The data shows that increasing numbers of buyers are returning, with the market starting 2023 much better than many predicted. The latest snapshot of buyer demand shows the number of people contacting agents is up by 11% in the last two weeks compared with the same period in 2019’s more normal market. Which is very telling. Also, the number of sales agreed continues to rebound, recovering from 15% down at the start of the year, and the 30% down following the mini-budget. While there is still an overall shortage of property for sale, down by 24% compared to 2019, there is more choice for buyers than at the same time in 2020. In addition, the latest sales agreed figures show that surprisingly it is the first-time buyer sector that is recovering better than the discretionary upper-end sector.
“The big question this month was whether we would see new sellers increasing their asking prices as has been the yearly norm as we approach the spring selling season. This month’s flat average asking price indicates that many sellers are breaking with tradition and showing unseasonal initial pricing restraint. “In addition to market conditions demanding greater realism on price, we are transitioning into a slower-paced market, where buyers will take longer to find the right property at the right price due to the higher cost of servicing a mortgage. There are other indicators that this will be a softer rather than a hard transition despite the turbulence at the end of 2022. Homeowners who are coming to market in the upcoming spring season should use their agent’s expertise and get the price right the first time, which can really help to find the right buyer more quickly.” Tim Bannister Rightmove’s Director of Property Science
Though it is early in the year, this month’s key metrics suggest that many buyers are seeing reasons to get on with their moves, and have the confidence to return to a market which, so far, is stronger than many expected. The number of potential buyers contacting agents is up by 11% in the last two weeks compared with the same period in 2019.
Propertymark portal has released its latest housing insight report revealing that demand for property is increasing. Their data reveals that the average number of new buyers registered per member branch rose from 39 in December to 70 in January. This jump in demand is a regular seasonal trend and suggests buyers have been waiting in the wings to start the hunt for their ideal home in the New Year. The average number of viewings per property also rose in January compared to December. The average last month was 2.9 compared to a December low of 1.8. “January’s market has picked up the pace with Propertymark estate agents reporting sales agreed up 50 per cent from December. Nathan Emerson, CEO of Propertymark
Over the last 12 months, the average sales price in Bristol was £365,808. 33% of sales in the past 12 months were flats, achieving an average sales price of £276,166. Houses achieved an average price of £420,229.
The UK economy avoided recession in 2022 with the economy recording 0% growth between October and December. The Bank of England expects any recession in 2023/24 to be shorter and shallower than previously predicted. The Bank of England has raised the base rate of interest to 4%, its highest rate in 14 years, with expectations the rate will peak at 4.5% this year.
Meanwhile, average mortgage rates have edged downwards after the turbulent months immediately following the mini-budget. Someone looking to take out a five-year fixed mortgage with a 15% deposit would now be looking at an average rate of 4.82%, compared with 5.90% in October.
In the year to January, monthly rental prices in the UK rose by 4.4%, up from 4.2% in December. The ONS Index of Private Housing Rental Prices includes pre-existing and new lets. At £1,074 the average rent in the UK in December was 0.1% lower than in November, the first fall in rental prices in over a year. Year-on year every region in the UK continues to see rental price growth (HomeLet). JLL predict the cumulative growth in rental values will be 15.9% in the five years to 2027, with higher growth in 2023/24 followed by growth closer to 2%-3% in 2025-2027 as inflation is brought back under control.
A final statement from Rightomve's Tim Bannister, a sentiment we certainly concur with at Ocean estate agents.
“The frantic market of recent years was unsustainable in the long-term, and our key indicators now point to a market which is transitioning towards a more normal level of activity after the market turbulence at the end of last year. Agents are reporting that they are now increasingly seeing buyers who have more confidence and more choice albeit with revised budgets to accommodate higher mortgage rates. “It’s a positive sign for the market to see many in the first-time buyer sector getting on with their moves.” Tim Bannister Rightmove’s Director of Property Science
As always, our teams are here to help, get in touch with any questions about your local property market, and to discuss your home move considerations.
Sources: Rightmove, Zoopla, Dataloft, Land Registry, National House Price Index, DLUHC
Mon 20 Feb 2023