Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
HM Land Registry – Sold Prices
As reported in the government’s latest UK House Price Index Summary, UK house prices rose by 4.1% in the twelve months to March 2023.
On a non-seasonally adjusted basis, this shows a fall of 1.2% between February and March – comparing with an increase of 0.5% during the same period last year. There were also 89,560 transactions of residential properties over March 2023, which is substantially lower than the same period 12 months ago. Indeed, this is 18.9% down on March 2022 numbers.
Mortgage approvals (a good indicator of future borrowing) did increase between February and March (from 44,100 to 52,000). Despite this tentative good news, these figures still remained significantly below the 2022 monthly average of 62,700.
Rightmove – Asking Prices
Average asking pries on Rightmove jumped by £6,647 (an increase of 1.8% over May 2023) – slightly above the historic May growth of 1%. This brings another record high of £372,894, as the market continues to defy pessimistic predictions at the start of the year.
Buyer demand is now 3% higher than 2019 levels (and a whopping 6% up for first-time buyer properties), with agreed sales just 3% behind. Average discounts on final asking prices have also steadied around 3%, which is also in line with pre-pandemic levels.
This positive activity (combined with a steadying in average fixed-rate mortgage rates) is bolstering pricing confidence. Nonetheless, the market remains hyper-localised with buyer affordability stretched, meaning sellers still need to be price sensitive to secure a quick sale.
This is especially the case for top-of-the-ladder properties, where buyer demand has fallen by 1% compared with pre-pandemic levels. It’s now taking an average of 67 days to agree a sale in this sector, nearly double the average (of 35 days) seen last year.
RICS – Chartered Surveyor Sentiment Survey
RICS Chartered Surveyors report that over April 2023, the property market struggled to gain momentum.
Over the month, higher borrowing costs and a negative economic outlook remained the main barriers to growth. Despite this, most indicators edged up when compared with the historic lows seen at the end of 2022.
Buyer demand was down by -37% in April (which was actually up from -30% seen in the previous two reports). Agreed sales were also down by -19%, but again up from -30% the previous month. Indeed, this is the least negative reading since July 2022.
The outlook for the year ahead was also cautiously optimistic. Sales expectations were at +3%, slightly up from +1% the previous month. While house price expectations point to a modest fall over the coming months (with a net balance of -48%), this is much more positive at the 12 month horizon – rising to -16%.
Zoopla – Housing Market Outlook
In Zoopla’s May House Price Index, they confidently note the worst of pricing adjustment as a result of higher mortgage rates appears to be over. Even though house prices will continue slowing over 2023 (and even move into negative territory), transaction volumes are set to grow.
The market is now remarkably balanced between supply and demand, much more so than the previous few years. With a range of social and demographic factors motivating people to move, this relatively stable market shows no signs of changing before the end of 2023.
As a result, Zoopla expect that if sellers continue with realistic asking prices, we’re still on track for 1.1 million sales by the end of the year. If so, this would be a highly positive outcome for the market.
Express Index
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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