May market snapshot
If you have seen our local market reports in recent months you'll know we've encouraged everyone to read past the national headlines. Yes, we've seen some adjustments, some would say a much-needed cooling off, but by no means a crash or even dramatic slide in prices. As for the latest results, well let's take a look.
The average price of property coming to the market jumps by 1.8% (+£6,647) this month to reach a new record of £372,894 in a delayed response to the higher-than-expected level of market activity since the start of the year
This 1.8% monthly increase is the biggest of the year so far and is significantly higher than the historic average May rise of 1.0%
Agreed sales numbers are currently just 3% behind the last more normal pre-pandemic market of 2019
The discount from the final asking price to the agreed sale price has steadied at an average of 3.1%, in line with normal market levels, reflecting home-mover confidence in the outlook for the market
“This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. One reason for this increased confidence may be that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely. What is much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years. Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come. The market is still very price-sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically-priced new instructions that are selling best.” Tim Bannister Rightmove’s Director of Property Science
Resilient demand and falling energy prices are set to help the UK economy grow by 0.4% in 2023 according to the latest forecast by the International Monetary Fund. Last month the IMF predicted the economy would shrink by 0.3%.
Inflation, the rate at which prices are rising, fell in April to 8.7%. This is the first time inflation has been below 10% since August (ONS). Slower rises in fuel prices are a significant reason behind the fall, while food price rises remain high.
The base rate of interest has risen to 4.5%, its highest rate in 14 years. The Bank of England has however upgraded its growth forecast for the UK economy, which is now expected to return to its pre-pandemic size by the end of this year.
Nationwide report the average price of a property rose 0.5% month-on-month in April, the first month-on-month rise after seven consecutive months of falls. Rightmove’s House Price Index is based on the largest and most up-to-date sample of properties coming to the market for sale, meaning that we are in a unique position to be the first to identify any early changes in the market. We expect our monthly price increases to be reflected in other indices over the coming months
In Bristol - Over the last 12 months the average sales price in Bristol was £370,780. The total value of sales was £1,952,702,757.
33% of sales in the past 12 months were flats, achieving an average sales price of £280,403. Houses achieved an average price of £425,828. The highest value recorded by the Land Registry over the past 12 months was £1,800,000 for a flat and £3,500,000 for a house.
“This month’s record price is a strong indication of sellers’ confidence, and we can see from activity levels and the still relatively limited choice of property for sale that this confidence is justified in some segments of the market. More discretionary sellers at the top-end may be prepared to price high and wait for the right buyer, and whilst it is positive that they appear to feel no financial pressure to sell, the data suggests that some sellers in this sector will need to price more competitively if they want to find a buyer in the current market. A more stable mortgage market is good news, and after a period of rapid rate rises followed by some significant falls this year, this period of relative stability will help home-movers to plan ahead.” Tim Bannister Rightmove’s Director of Property Science
Over 52,000 mortgages were approved in March, up 18% on February according to the latest data from the Bank of England. This represents the most significant month-on-month rise since early 2009 (excluding the summer of 2020).
70% of buyers canvassed in April were confident they would purchase a property within the next three months, and just 7% stated they were concerned about securing a mortgage to fund the purchase (OnTheMarket).
40% of respondents to the latest RICS Residential Market Survey state they are seeing more interest from buyers in homes that are more energy efficient, with 61% of respondents stating energy-efficient homes were holding their value in current market conditions.
The number of buyers enquiring to agents about homes for sale is now 3% higher than at this time in the last more normal market of 2019. This is led by the first-time-buyer and second-stepper sectors, with buyer demand now 6% and 3% above pre-pandemic levels respectively. Second-stepper properties now take 52 days on average, and first-time-buyer properties now take 53 days, up from 35 days a year ago.
A steadying in average fixed-rate mortgages is also contributing to greater home-mover confidence. The average rate for a five-year fixed, 15% deposit mortgage is now 4.56%, down from 5.89% in October. To add some further context, this compares to 4.52% last week. With mortgage rates starting to remain relatively stable week-to-week despite a further Bank of England increase in the base rate, home-movers can more easily understand and plan for the expected costs of their mortgage.
The HMRC report 89,560 sales took place in March 2023, a rise of just 1.3% in February. Non-seasonally adjusted figures however suggest there was a 26% rise. At +1 a net balance of agents expect 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. 43% of properties sold subject to contract in April within 30 days of being advertised, compared to 63% a year ago. 64% of sellers were confident they would sell within 3 months according to the latest sentiment survey by OnTheMarket.
We hope that was useful and informative. 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, On the Market, Dataloft, Land Registry, National House Price Index, DLUHC
Wed 24 May 2023