However, market's sensitivity to pricing and external factors still persists
The UK property market saw its largest surge in new seller asking prices in 10 months, rising by £5,279, or 1.5%, this month, according to property listing platform Rightmove.
As a result, the average asking price is now £368,118, up from £362,839 last month. The increase surpasses the typical March uplift of 1% and represents annual growth of 0.8%.
Rightmove attributes the market’s vibrancy partly to a 13% year-on-year hike in the number of sales agreements, with buyer demand 8% higher than the previous year. This demand is notably strong in the sector for larger homes and in London, which are less affected by mortgage rates. The number of sales being agreed is also 13% higher than at this time last year.
While the market has made a promising start to the year, it continues to be affected by pricing sensitivities and broader external influences. Data from Rightmove highlights how the Spring Budget’s lack of direct support for first-time buyers and the absence of new mortgage market innovations have somewhat restrained the growth in buyer demand.
The average duration to secure a buyer has extended to 71 days, marking the lengthiest period for this season since 2019. Properties priced attractively are being taken swiftly by buyers, while properties with overly optimistic pricing are facing longer wait times to attract interest.
Rightmove also noted a shift in the landscape of mortgage rates, adding another layer of complexity for potential buyers. The average rate for a five-year mortgage has increased from 4.64% to 4.84% in just five weeks, signalling a move towards higher borrowing costs.
“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,” said Tim Bannister, director of property science at Rightmove. “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.”
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