Digital Zeitgeist – Economic Headwinds Slow House Price Growth
According to Rightmove, the home market is adapting to a slower pace and “more normal” activity levels observed in the pre-pandemic market of 2019.
According to Rightmove statistics, the average price of a house going on the market this month increased by 0.2% to £366,247.
This was less than the 1.2% usual growth for this time of year.
It showed that many new sellers are “taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels last seen in the pre-pandemic market of 2019”, the property website said.
The number of sales that were agreed upon was comparable to the amount witnessed during the same time period in 2019, although it was noted that residences are selling on average more swiftly now.
Tim Bannister, Rightmove’s director of property science, said: “Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt spring buyers with a competitive price.
“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace.
“Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.
“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling 12 days more quickly than at this time in 2019.”
Record prices for homes for first-time buyers
However, after creeping up by 0.2% month-over-month in April, the average price tag for a first-time home reached a record high of £224,963.
Generally speaking, sales in this industry were around 4% higher than during the same period four years prior, partly because first-time purchasers were attempting to avoid increasing rents.
Mr Bannister said: “The first-time-buyer sector typically accounts for over a third of all sales, which are often the start of chains, so these positive sales agreed figures are good for the health of the whole market.
“The current multi-speed market is highlighted by sales of larger homes continuing to lag behind, with some sellers in the upper sectors likely needing to show a greater degree of pricing restraint to attract buyers in this much more price-sensitive market.
“More competition amongst lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move.
“However, it remains a challenging environment to get onto the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago.”
A significant turning moment
The study from Rightmove included commentary from real estate agents.
Karl Tatler, managing director at Wirral-based Karl Tatler Estate Agents, said: “The beginning of the spring market has been a real turning point, after a difficult start to the year and following the turbulence of the last three months of 2022.
“Listing figures are comparable with last year, while viewing figures are down only slightly, which given the exceptional market of last year is quite remarkable.”
Ben Rose, director at Lancashire-based Ben Rose Estate Agents, said: “We’re seeing locally that the number of new instructions and sales agreed is the highest it has been for several months, and while this is not the very high level they were during the pandemic years, they are high compared to before the pandemic.”
online sources: theguardian.com, rightmove.co.uk, karltatler.com