The average price of UK homes hitting the market has risen by just £14 this month to £362,452 in the smallest increase from January to February on record.
Demand is starting to pick up as rising mortgage rates start to stabilise, with the number of potential buyers contacting agents up by 11% in the last two weeks compared with the same period in 2019, according to property site Rightmove.
This interest from prospective homeowners is beginning to translate into deals, as the number of sales agreed is now just 11% down on the same period in 2019’s more normal market, picking up from 15% down at the start of the year and vastly improved from 30% down in the aftermath of September’s mini-Budget.
Meanwhile average mortgage rates have edged downwards after the turbulent months immediately following the mini-budget. The latest data shows that 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.
“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,” Tim Bannister, Rightmove’s director of property science, said.
“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,” he added.
Asking prices for homes in Camden surged 17.2% from a year ago, lifting the average price to nearly £1.16m.
Camden was followed by Barnet and Islington, where asking prices were up around 8% year-on-year, then Haringey (+7.1%) and Sutton (+6%).
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The market is still struggling to satisfy demand, with the number of available properties to buy down by 24% compared to 2019. Still, the number of available homes for sale is up by 48% on the record low levels 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, though despite average mortgage rates having edged down, some first-time buyers will still be priced out of their original plans and may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets,” Bannister said.
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