Welcome to the GetAgent Property Market Update! We’ve gathered insights from the best experts across the UK to bring the latest from February.
For the third month in a row, there’s been no change in the annual growth of house prices, which has remained at +2.1%. Despite a decline of approximately £8500 from their peak in August 2022, current prices are still £9000 higher than their average at the beginning of 2022.
Although there’s still room for debate, according to Kim Kinnard, the Director of Halifax, it’s likely that "most sellers will hold onto the price gains they achieved during the pandemic."
In other news, the Bank of England has recently released figures indicating a decline of approximately 2.2% in the number of approved mortgages for property purchases in January 2023. This decrease is likely due to the ongoing shift towards a Buyer's Market, which has resulted in market adjustments to account for the reduced buying power that followed the October Budget.
In this month’s update, we cover all of the above and more - with fresh perspectives on asking prices and buyers still to come!
The latest data from Halifax's House Price Index indicates that average house prices across the UK experienced a slight increase of 1.1% in February, rising from £282,360 in January to £285,476. While recent reductions in mortgage rates and increased confidence in the market can be attributed to the stabilisation of house prices, they are still slightly below the mark reached in November, which stood at £285,579.
Asking prices have remained flat this February, with Rightmove citing a £14 increase (their smallest ever) from January. Rather than a fall as many expected, this could be seen as a positive sign that homesellers have broken tradition and kept prices static rather than increasing them - a sign that sellers are listening to the advice of their estate agents.
The number of sales agreed continues to rebound, with the property giant reporting they are 11% down on 2019’s levels, recovering from 15% down at the start of the year. The combination of sellers being realistic on price, and the improving picture of the number of sales being agreed suggests a softer landing for the market than many expected.
Zoopla paints a somewhat different picture. Over 40% of the properties currently listed for sale have seen their asking prices reduced to attract buyers, with adjustments uniform across regions and property type. While sales have recovered, sellers are accepting larger discounts to secure them.
Discounts are apparently larger than pre-pandemic years, and Zoopla claim these are indicative of the property market’s fast transition to a Buyer’s Market with negotiation on price becoming more important.
As the property market continues to recover from the impact of the pandemic, there has been a rebound in buyer demand, although at a lower level compared to the same period last year.
According to Zoopla, the number of homebuyers searching for properties has significantly increased in the first two months of 2023. Similarly, Rightmove's latest snapshot of buyer demand reveals an 11% increase in the number of people contacting agents in the last two weeks compared to the same period in 2019, which was considered a normal market year.
Despite this uptick, demand remains at only half of what it was a year ago. This can be attributed to slower sales and a steady flow of new supply, which has increased the stock of homes for sale by over 60% compared to last year. As a result, the average estate agent office now has 24 homes for sale compared to just 15 a year ago.
While the number of homes for sale has increased, there is still an overall shortage, with stock down by 24% compared to 2019. Nonetheless, there is still more choice for buyers than a year ago, giving prospective buyers the confidence to make their onward move.
As mentioned earlier, the Bank of England's latest figures reveal a 2.2% decrease in the number of approved mortgages for house purchases in January 2023. While this may be concerning, it's worth noting that this figure is still higher than it was in January 2020 - just before the pandemic hit our shores.
What’s more, the January 2023 figure is only 46% below January 2022, suggesting that the housing market is still showing resilience despite the ongoing challenges of the pandemic.
One of these challenges is the higher mortgage rates that have become the norm in recent months. However, experts say that the market is adjusting better than expected. While it's true that new buyers are now facing rates in the 4-5% range, these rates are still attractive compared to historical averages. And with strong competition among lenders expected to continue, borrowers can still find deals that work for them.
For example, Rightmove’s data reveals that the average rate for a 15% deposit five-year fixed mortgage has fallen from 5.90% in October 2022 to 4.82% in recent months. While these rates are unlikely to drop much further, they do show that there are still attractive options available for buyers who are looking to enter the market.
While the market has been simmering for some months now, we know it can be hard to find the positives during a particularly harsh economic climate. Luckily, there are some positives:
We’ll see you next month!
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