House prices up by £14 — but don’t spend it all on prosecco just yet

You can forget about champagne, and even prosecco should be kept on ice for now, but the real estate market in early 2023 seems to be in much better shape than we thought during the dark days of last October. Annabelle Dixon reports.

• The market is better than expected

• More buyers contact agents

• Softer landing than many expected

• But the real test awaits in the spring

With the onset of spring, fresh data suggests that the housing market may show growth. This week, Rightmove released its February Housing Market Review, highlighting its bottom line: “Better-than-expected market surprises many as buyers return.”

So what are the numbers behind this?

Average asking prices were virtually unchanged in February, up only £14 – not £140 or £1400, but actually £14. the traditional champagne you open in your new home. However, as noted by the real estate portal, price maintenance at the same level is a positive sign, given the broader expectations. Lloyds Banking Group – one of the country’s largest mortgage lenders – released its latest home price forecasts in its annual report, saying it expects prices to fall by 7% this year – although it also added bad and worst-case scenarios that predict an overall drop from peak to a minimum of more than 25%. Against the background of such despondency, an increase of fourteen pounds looks positive.

Rightmove also reported other positive signs, not least that people are increasingly contacting real estate agents again. Over the past two weeks, inquiries from potential buyers have risen by 11% compared to the same two weeks in 2019 (probably the last year we saw a “normal” housing market, although uncertainty about Brexit and government stability was still very serious). photo of the time). The number of agreed sales has also increased from what it was four years ago: it was down 30% after the mini-budget was passed, but it is now down just 11% compared to the same time period in 2019. This is a significant shift.

The portal’s numbers also show that when it comes to consistent sales, “surprisingly, the new buyers sector is recovering better than the discretionary upscale sector.” Rightmove says that “While this is just the beginning, the combination of sellers being more realistic about pricing and an improved picture of the number of agreed-upon sales suggests a softer landing in the market than many expected.”

Spring is a real test.

That more optimistic tone echoes the Hamptons real estate agent, who says his major leading indicators for January “show a recovery picking up for the second straight month, painting a less bleak picture than some might think.”

Tom Bill, Head of UK Residential Research at Knight Frank, says: “The six weeks after Christmas are markedly different from the chaotic last three months of last year for the UK property market.

“Buyers and sellers turned off early for the holidays due to volatility caused by the mini-budget, but unexpectedly bounced back strongly in 2023. The key difference lies in the stability of the mortgage market, which means the renewal of plans.”

Of course Rightmove is talking about asking prices, buyer demandsales agreed, not sale completion. As Bill says, the true strength of the market will be tested in the spring.

Confidence is “slowly rising”

Fresh data from HMRC shows 96,650 homes were sold in January, down 11% from the same month last year and down 3% from December 2022. Deals are now similar to pre-pandemic levels. The fall of this key market leader seemed almost inevitable, says Jeremy Leaf, a north London real estate agent and former chairman of RICS.

He explains: “Confidence takes a long time to build up and can disappear very quickly, but it is rising slowly in response to lower mortgage rates and inflation, and continued job stability.”

Yes, mortgage rates are gradually coming down, and recently a number of lenders have introduced five-year mortgages with a fixed interest rate of less than 4%.

But we’re not out of the woods yet, warns Mark Harris, chief executive of mortgage broker SPF Private Clients. He adds: “We expect prices to rise and fall over the next few months with no apparent trend.”

With wood paneling and armor in the lobby, the Home Counties Mansion is one of the gems on offer.