"It’s been a positive first three months of the year for the market and better than many anticipated."
- Tim Bannister, director of property at Rightmove
The average price of newly marketed property has risen by 1.5% (£5,279) this month to £368,118, higher than the historic average March increase of 1.0% and the biggest for 10 months, as the market continues its recovery after a muted 2023.
Rightmove has 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.
Average asking prices are still £4,776 below the May 2023 peak and Rightmove says the increase in buyer activity suggests that "more are seeing a window of opportunity to buy". Rather than the start of another market surge, Rightmove believes the signs are that overall activity levels have now returned to steadier pre-pandemic norms.
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% 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 so far, buyer demand for top-of-the-ladder properties is 12% higher than the same period last year, compared with 8% higher overall for all property types.
London has seen the biggest increase in buyer demand, both overall and for top-of-the-ladder properties, compared to this time last year. The return to the office, wage increases, stable house prices and the slowing of inflation have all played their part in increasing buyer interest in living in the capital again.
However, agents report that despite this better-than-expected start to the year, the market is still sensitive to pricing and external events, such as last week's Budget. Rightmove’s real time data shows an immediate pause in interest from some buyers following the Budget, in response to the scarcity of housing announcements.
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, whilst 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% compared to 4.64% five weeks ago, continuing to test buyer affordability.
Tim Bannister, director of property at Rightmove, commented: “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.”
“It’s been a positive first three months of the year for the market and better than many anticipated. However, we know from last year how quickly the picture can change with some negative economic news or surprises, evidenced in Rightmove’s data which captured the immediate buyer reaction to the lack of major housing initiatives in the Spring Budget. Sellers are right to feel more confident and optimistic this year, but buyer affordability remains stretched and higher mortgage rates are an ongoing challenge. With the market still sensitive to pricing and external events, some caution and willingness to negotiate is advised for sellers who are keen to find a buyer in the Spring market.”
