Property Market Update: March 2023

Welcome to the GetAgent Property Market Update! We’ve gathered insights from the best experts across the UK to bring you the latest from March.

Homesellers will be pleased to know that the market is continuing to perform much better than what experts predicted during the latter half of 2022. A softer landing is very much in progress, with one million property sales expected before the end of the year.

Despite clear signs of positive action, leading indexes have been at odds over the current state of national house prices. Halifax, in its latest report, states that annual growth has slowed from a three month period at +2.1% to +1.6%. Nationwide however, reports that we’re already in negative figures, with annual growth down -3.1%, the largest annual decline since July 2009.

All this, and more, in the latest GetAgent market update.

One million home sales expected by year’s end

In their analysis of new sales data over the past nine months, Zoopla indicates that the UK property market is poised to achieve at least half a million home sales by the end of June, and more than one million by year’s end.

The report notes that this burgeoning sales activity is underpinned by a 65% increase in available homes compared to March of the previous year. This month, there were 25 homes marketed per an estate agent on average - 11 ahead of last year.

This ample supply of available homes is believed to have fueled interest in the market by providing homebuyers with greater freedom of choice.

House prices - a mixed picture

As home sales exceed expectations, the current state and trajectory of house prices this month presents a mixed picture.

According to Nationwide, national house prices have been falling for the past seven months. Their latest figures show an average of £257,122, with a monthly change of -0.8% from February's £257,406. Annual growth is also down by -3.1%, marking the largest decline since July 2009, which occurred shortly after the 2008 Financial Crisis.

In contrast, Halifax's latest report shows that average house prices increased by +0.8% in February to £287,880 in March. Although annual growth reportedly slowed from +2.1% +1.6%, Halifax's figures reflect a more optimistic outlook.

Homeowners may be wondering why these datasets are so different, and how they can determine which one is more reliable.

As reputable mortgage lenders, Halifax and Nationwide release monthly house price indexes based on their own research and methodology. While they use similar data sources, such as their own mortgage approvals and valuations, their indexes often differ due to variations in their methodology.

Halifax for instance, bases their data on the prices at which its own mortgages have been approved. Nationwide however, bases its data on its own mortgage approvals and survey data from estate agents. These differences can lead to discrepancies in the average house prices reported by each lender.

Despite the higher month-on-month figures from Halifax, the annual trajectory seems to acknowledge a slowdown is taking place. Though still in the positives, the reduction from 2.1% to 1.6% suggests some correlation with Nationwide's figures. The market is cooling, and returning to a similar state seen in 2019, albeit with more activity.

Mortgages - Some positivity amid market slowdown

In other news, the mortgage market is experiencing a series of shifting trends and mixed signals.

Rightmove reports that average mortgage rates have fallen slightly from their peak the previous year. The average rate for a 15% deposit five-year fixed mortgage is now 4.65% - down from last month's 4.75% and October's 5.89%. Though rates are expected to remain at around 4% for much of 2023, there is still a possibility of further falls towards year’s end.

There has been some positive news from the Bank of England. Its latest figures show that the number of mortgages approved to finance house purchases increased in Feb 2023 by 9.8% to 43,536 - a reaction that could be attributed to lenders adjusting their rates from last year’s highs.

Despite this improvement in activity, Halifax argues that mortgage costs are unlikely to significantly decrease in the short-term. The current norm of increasing costs and lower demand is expected to support the ongoing shift to a Buyer’s Market.

Fiscal homeowners should keep an ear to the ground for further developments throughout the rest of the year.

New buyers are prioritising affordability - how should homesellers react?

First-time buyers represented 33% of total home sales in 2022, according to data from Zoopla. With significant inflation in the rental market, would-be homeowners are prioritising affordability and turning to smaller properties. This trend is expected to drive an increase in the number of first-time buyers in the market.

Rightmove’s Director of Property Science, Tim Bannister supports this view, reporting that homemovers who lost out in the market boom ‘will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season.’

With the market landscape having changed significantly since this time last year, homesellers need to consider new strategies to ensure a successful sale. So, what steps can they take to prepare for this shifting market?

Consider your pricing strategy carefully

In response to the cost of living crisis, first-time buyers are prioritising affordability. The trend for spacious homes has diminished, with homeowners becoming more financially responsible.

Homeowners must market and present their property in a way that emphasises value for money. Pricing your property right from the outset will help attract buyers and ensure a timely sale.

Be willing to negotiate on price

Homeowners are facing rising costs for essentials such as energy, food, and household goods. As such, it’s important for homesellers to be willing to negotiate on price in order to close the deal. Being realistic, flexible, and responsive to the market will be essential for achieving a successful sale in the current climate.

Be patient

Lastly, patience is key. Although sales are still reasonably strong, the selling process may take longer than in previous years. It’s important to adjust your pricing and marketing strategies as needed to attract buyers, and achieve a successful sale.

Don’t rely on instinct - sell your home using reliable data

Choosing the right estate agent is a pivotal part of the homeselling process - but instinct can only go so far. You should make your choice by interpreting hard data from the Land Registry and property portals.

Don’t have the time? Not a problem - our Estate Agent Comparison Tool does it all for you, ranking the best local agents by experience, speed, and percentage of asking price achieved. Did we mention it’s free?

Ch-ch-changes!

The market’s certainly changed a lot over the last year. And while this month has been a mixed bag, spring - a busy time for the sector - is well and truly upon us. That means it's all the more important for homesellers to pay attention to current trends in the market. Stay vigilant, remain calm - and most importantly, listen to your local estate agent.

We’ll see you next month for our next market update!