Spring optimism in property market

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Spring optimism in property market

The average price of property coming to the market for sale rose by £5,279 in March to £368,118, as the market continues its recovery after a muted 2023.

The positive start to the year has continued as property portal Rightmove recorded an increase in buyer demand, measured by people sending enquiries to estate agents, and stronger sales numbers than a year ago.

This, alongside the usual spring optimism, has put upwards pressure on prices.

March’s 1.5% price growth is notably higher than the average historic increase of the month which comes in at around one per cent.

It is the biggest monthly increase in prices for 10 months.

However, average asking prices are still £4,776 below the May 2023 peak and the increase in buyer activity may suggest that more are seeing a window of opportunity to buy.

Higher activity at the start of this year compared to last year must also be looked at in the context of the more cautious start to 2023, according to Rightmove.

Rather than the start of another market surge, the signs are that overall activity levels have now returned to steadier pre-pandemic norms.

However, the elevated level of mortgage interest rates means that the increased activity is skewed towards those buyers who are less sensitive to higher mortgage costs.

Tim Bannister Rightmove’s, director of property science, says: “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway.

“However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.

“Despite the above average price increases in this opening three months of the year, asking prices are still £4,776 below their peak in May 2023.

“For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy as we now seem to be past the bottom of the market.

“While some sellers are still being over-optimistic with their pricing expectations, there are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers.”

Since the beginning of March, the number of sales being agreed is 13% higher than at the same time last year, continuing to pave the way for a higher number of transactions this year than the one million in 2023.

Leading these higher sales agreed numbers is the less mortgage-rate-sensitive, top-of-the-ladder sector, where agreed sales are now 18 per cent higher than last year.

It is also this largest homes sector which is driving more people to get in touch with estate agents than at this time last year.

In March, buyer demand for top-of-the-ladder properties was 12 per cent higher than the same period last year, compared with 8% higher overall for all property types.

The average time to find a buyer is now 71 days, which is the longest at this time of year since 2019.

Agents report that buyers are quickly cherry-picking attractively priced properties, while over-priced properties are taking much longer, pushing the average time to find a buyer up.

Meanwhile, after several weeks of creeping rate rises, the average five-year mortgage rate is now 4.84 per cent compared to 4.64 per cent five weeks ago, continuing to test buyer affordability.