Latest house price index revealed the smallest January to February increase on record
The average price of property coming to the market rose by just £14 to £362,452 this month, according to property listing platform Rightmove.
Its latest house price index revealed the smallest January to February increase on record, with monthly price growth turning flat, while, annually, average house prices grew by 3.9%.
This, Rightmove said, reflected slower market conditions as new sellers held prices static for the first time ever at this time of year rather than increase them.
The property platform, however, noted that prices remaining flat rather than falling as some expected could be seen as a positive indicator for the year ahead.
“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,” Tim Bannister, director of property science at Rightmove, remarked. “This month’s flat average asking price indicates that many sellers are breaking with tradition and showing unseasonal initial pricing restraint.
“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.”
House prices recovered in January, recording a 0.9% price increase after consecutive monthly price falls during the latter part of last year.
“The frantic market of recent years was unsustainable in the long term, and our key indicators now point to a market which is transitioning towards a more normal level of activity after the market turbulence at the end of last year,” Bannister said.
“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.”
Simon Woodcock, managing partner at estate agency Robinson Michael & Jackson, said they had indeed observed increased seller activity in January, with first time buyer properties and the typical three-bedroom family home being the most popular property types coming to market.
“For some, the challenge in 2022 was the lack of properties to buy with demand outstripping supply,” Woodcock pointed out. “Now that the market has moved to a better balance of supply and demand, we are seeing some potential 2022 sellers take the plunge early in 2023.
“First-time buyers were dominant in January, with stabilising prices combined with reducing fixed rate mortgages making it more affordable to get on the property ladder. Sellers are becoming more in tune to the market with those most motivated reducing asking prices to get sold and make their savings on the next purchase.”
Angela Hesketh, director of conveyancing transformation at automation platform Smoove, agreed that rising demand from prospective buyers and the pick-up in the number of agreed sales were both encouraging signs of confidence returning to the market.
“Of particular note are the resilient sales numbers from first-time buyers, suggesting a strong drive among this group to move forward with purchases despite the tough economic environment,” Hesketh added. “Static new seller asking prices, though, do indicate the arrival of more conservative market conditions after the surging house prices of the pandemic years. While sellers will likely need to continue to adapt their pricing expectations, the transition to a slower market is set to be far softer than many would have anticipated late last year.”
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