Property asking price bounce shows signs of recovery, says Rightmove

According to Rightmove, the real estate market is showing signs of recovery and confidence is growing among buyers and sellers.

The property giant said the average asking price of newly listed homes rose 1.8 percent in May to a record £372,894, but added that buyers also seemed more optimistic.

Buyer demand also saw a 3 percent increase compared to the same period in 2019 as the mortgage market continued to stabilize after the rapid rise in interest rates late last year.

The monthly growth in asking price is the largest so far this year, significantly above the historical average for the month of 1 percent, and means the average home price tag is £6,647 higher, the property website says.

The increase in confidence was supported by the mortgage interest deduction, although it remains much higher than in previous years. An average 5-year term for an 85 percent loan-to-value mortgage is now 4.56 percent, compared to 5.89 percent in October last year.

Lenders offered cuts in February, when interest rates fell to 3.75 percent, sparking hopes of a rate war to depress prices, but have since risen to more stable levels of between 4 and 5 percent.

Despite successive increases in base rates, top rates seem to have settled around this level. For those looking for a mortgage there are still deals available under 4 percent, but just barely.

At the same time, the discount from the asking price to the agreed selling price has ‘stabilised’ to an average of 3.1 percent, in line with ‘normal market levels’.

Tim Bannister, Rightmove’s director of real estate science, said: “This month’s surge in asking prices from new sellers appears to be a belated reaction and a sign of increasing seller confidence as we normally see such a large monthly price earlier in the spring. would see an increase. season.

One reason for this increased confidence may be that the gloomy forecasts for the start of the year seem increasingly unlikely for the market.

“What is much more likely is that the market will continue to transition to a more normal level of activity this year after the exceptional market activity of the pandemic years.”

However, Bannister warns that the market is still “highly price sensitive” and sellers should be careful not to overprice and then lower, as brokers report that realistically priced new instructions sell best.

As the market recovers, first-time buyers lead the way as group demand is 6 percent higher than before the pandemic. Similarly, demand for a second stepper is up 3 percent.

On average, it now takes first-time buyers 53 days to sell homes, compared to 35 days a year ago. Second stepper properties sell in 52 days, compared to 28 last year.

However, larger properties are struggling due to overconfidence at the top end of the market, which took an average of 67 people to agree a sale, compared to an average of 35 days last year this time around.

Bruce Patterson, managing director at Corumin Ayrshire said: ‘Good housing in key residential areas continues to attract strong demand and sell quickly, and there is still an undersupply of owner-occupied properties across all price ranges.

“Accurate initial pricing remains essential, and we’re seeing more sellers set competitive and realistic pricing expectations for the current market, making overpriced stocks stand out as well.

“We are still seeing a continuation of people moving from cities and urban areas to coastal areas, where they get more space and bigger premises for their budget. ‘

The average stock per broker rose in April from 45 in March to 47 homes. Regionally, London saw the biggest price growth, with average property rising 2.8 per cent over the month to £696,477 in May.

In contrast, prices fell 2.3 percent in the Northeast, the only place to see negative growth this month.