Buyer demand up but house prices remain static

The number of agreed sales is returning to near 2019 levels having recovered strongly from a 30% drop in the aftermath of the mini-Budget, according to a new report. 

The Rightmove House Price Index reveals that the number of sales agreed continues to improve, and is now just 11% down on 2019’s levels, recovering from 30% down in the aftermath of the September mini-Budget.

Average rates for a 15% deposit five-year fixed mortgage are now 4.82%, down from October’s 5.90%.

Average new seller asking prices remain flat this month, rising by just £14 (+0.0%), the smallest ever increase from January to February and a sign that more sellers are heeding their agents’ advice to price right first time.

‘Sellers are breaking with tradition’

Tim Bannister, Rightmove’s director of property science, said: “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.”

He added: “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.”

First-time buyer sector recovering most strongly

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.

However, the number of available properties is 24% less than in 2019 showing that a shortage still remains but there is more choice for buyers than last year increasing market confidence.

The latest sales agreed figures show that it is surprisingly the first-time buyer sector that is recovering most strongly and is down by only 7% on 2019.

‘17% uplift in viewings and 14% decrease in withdrawals’

Matt Thompson, Chestertons’ head of sales, said: “This month, we have so far seen a 17% uplift in viewings and 14% decrease in withdrawals.

“This shows us that there are currently fewer window shoppers and the buyers who are entering the market are more serious about closing a deal.”

He added: “For the remainder of February, as mortgage products have already come down, we expect to see more buyers wanting to capitalise on favourable rates before we enter the spring market which is expected to get more competitive due to pent-up demand.”

The firm’s head of research, Sebastian Verity, points out: “Buyers are usually quicker to respond to changes in conditions than sellers and, with the Bank of England suggesting that inflation may now have turned a corner and signs of improvement in the mortgage rates now being offered, some have clearly been encouraged to act now.

“But in doing so they are finding that there is less on the market – less choice means more competition and this in turn seems to be helping to support prices.”

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