March Market Report. Local property news for you...
“March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway. However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.
For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy as we now seem to be past the bottom of the market. While some sellers are still being over-optimistic with their pricing expectations, there are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers.”
Tim Bannister Rightmove’s Director of Property Science
Prices
The February analysis from Rightmove tells us the average price of property coming to the market for sale rises by 1.5% (+£5,279) this month to £368,118, as the market continues its recovery after a muted 2023.
Halifax says “UK house prices rose for the fifth consecutive month in February, up by +0.4% or £1,091 in cash terms, with the average house price now £291,699.
“On an annual basis, house prices were +1.7% higher than a year ago, slowing from +2.3% in January. However, these figures continue to suggest a relatively stable start to 2024 and align with other promising signs of increased housing activity, such as mortgage approvals.
“In fact, the average price tag of a home is now only around £1,800 off the peak seen in June 2022. While it is encouraging that we’ve seen growth in recent months, what happens next remains uncertain. Although lower mortgage rates, alongside expectations of Bank of England interest rate cuts this year, should help buyer confidence in the short term, the downward trend on rates is showing signs of fading.
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “UK house prices rose by 0.7% in February, after taking account of seasonal effects. This resulted in an improvement in the annual rate of house price growth to 1.2% in February, from -0.2% the previous month. House prices are now around 3% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.
Bristol
33% of sales in the past 12 months were flats, achieving an average sales price of £279,526. Houses achieved an average price of £411,232.
Demand
The positive start to the year continues, with Rightmove recording an increase in buyer demand, measured by people sending enquiries to estate agents, and stronger sales numbers than a year ago. This, alongside the usual Spring optimism, has put upwards pressure on prices. This month’s 1.5% price growth is notably higher than the average historic March increase of 1.0%, and the biggest monthly increase in prices for 10 months.
Bank of England say there were 55,227 mortgage approvals in January, the highest level since October 2022 and 40.2% above the same time last year. New buyer enquiries in the latest RICS Residential Market Survey stayed positive for a second successive month (+6% net balance) showing a continued upwards trend in buyer demand.
Buyer demand is up 11% year-on-year, while the supply of homes for sale is 21% higher during the same period says Zoopla.
Higher activity at the start of this year compared to last year must also be looked at in the context of the more cautious start to 2023. Rather than the start of another market surge, the signs are that overall activity levels have now returned to steadier pre-pandemic norms. However, the elevated level of mortgage interest rates mean that the increased activity is skewed towards those buyers who are less sensitive to higher mortgage costs.
Nationwide say Signs of easing in affordability pressures “The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market. Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries"
Transactions
The HMRC report that 82,000 sales took place in January, an uptick of 1.9% on the previous month, but down -11.9% on last years levels.
RICS' measure for agreed sales showed a net balance of -3% in February, stronger than the average over the last 12 months (average net balance of -22%). The number of sales being agreed is 13% higher than the same time last year according to Rightmove.
Investment/lettings
Annual growth in rental prices in the UK stayed at 6.2% in January, the same as in December and the strongest since records began. The Index of Private Rented Housing Prices reports on both new lets and renewals.
The average UK rent rose by 0.2% in February to £1,262, 7.4% higher than the same time last year says HomeLet.
Goodlord state the average void period shortened from 22 days in January to 18 days in February.
We hope that was useful and informative. As always, our teams are here to help, get in touch with any questions about your local property market, and to discuss your home move considerations.
If securing a new mortgage or arranging a re-mortgage is important for you right now, click here to book an online consultation, our mortgage brokers are independent, and their services are free to you.
Finally, if you are (understandably) confused by some of the mixed market reporting, not least by some of the more sensational news reporting each month, click here for some independent insight into how House Price Indexes are compiled.
Sources: Rightmove, Zoopla, On the Market, Dataloft, Land Registry, National House Price Index, DLUHC
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