After a quieter quarter 4 of 2022, with most regions registering a small price fall and demand down by 50% in December, demand has rebounded to pre-pandemic levels, in line with 2018 and 10% higher than in 2019. At the end of 2022, UK house price inflation had slowed to 6.5% from 8.3% at the end of 2021, a trend matched across all regions except London according to Zoopla.
It is likely that demand will improve further in the coming months as mortgage rates continue to fall and ‘would-be’ movers realise that large price falls are unlikely to materialise.
The average asking price of newly listed property increased by £14 this month compared with January to take the median price to £362,452. This is the smallest ever increase from January to February and a sign that more sellers are heeding their agents’ advice to price right the first time. At David Phillip Estate Agents, David Phillip FRICS has been valuing properties for over 30 years, and on the All Agents property portal is voted 100% valuation accuracy which is key.
Average mortgage rates have edged downwards after the turbulent months immediately following the September mini-budget. The latest data shows that someone looking to take out a five-year mortgage with a 15% deposit would now be looking at an average of 4.82%, compared with 5.90% in October.
Though it is still very early in the year, this month’s key metrics suggest that many buyers are seeing reasons to get on with their moves, and have the confidence to return to a market which, so far, is stronger than many expected. The number of potential buyers contacting agents is up by 11% in the last two weeks compared with the same period in 2019.
This demand is now beginning to translate into sales say Rightmove, as the number of sales agreed in now just 11% down on the same period in 2019’s more normal market, picking up from 15% down at the start of the year, and vastly improved from the 30% down in the aftermath of September’s mini budget. This is quite a remarkable turnaround given the rapid increase in mortgage rates less than 6 month’s ago. Perhaps even more surprisingly, it is sales in the firs-time buyer section which are holding up strongly, and thus starting ‘chains’ that will add further impetus to the top end of the market.
The number of available homes for sale is up by 48% on the record low levels of last year, and this slower-paced, greater-choice market appears to be suiting the mass of buyers who need to organise a mortgage and who often lost out to cash buyers in the frenzied best bid scenarios of recent years.
Most price falls were as a result of Buyers negotiating harder on price. Moreover, the discounts to asking prices to achieve a sale widened quickly at the end of 2022, but this gap between asking price and sales agreed is between 3-4%
David Phillip commented, ”the frantic market of recent years was unsustainable in the long term, and all key indicators now point to a market which is transitioning towards a more normal level of activity after the turbulence at the end of last year. We are now seeing buyers who have more choice and sellers who have more confidence which is a much more positive situation”.
If you are considering selling your home knowing that the market is returning to its pre-pandemic levels of normality and would like a free market appraisal with David Phillip FRICS, please call 01134 676 400
David Phillip Estate Agents, 86, Leeds Road, Bramhope, Leeds w:davidphillip.co.uk e:info@davidphillip.co.uk
Covering Bramhope, Adel, Cookridge, Pool-in-Wharfedale and Otley.