Yahoo Finance Here’s why the property crash may not be as bad as initially thought
Asking prices of homes for sale have risen by just £14 in the last month – the smallest increase on record for this time of year.
Property website Rightmove found the average price of a property coming to the market this month had increased by just £14, equal to 0pc, the smallest ever increase from January to February.
Prices remaining flat rather than falling could be seen as a positive sign for the year ahead, the website said, suggesting that sellers are heeding their agents' advice and “being more realistic on price”.
The annual rate of growth slowed to 3.9pc in the 12 months to February, down from 6.3pc in January.
Despite the turbulent economic conditions, buyer demand is rising. According to figures from property website Rightmove, the number of people contacting estate agents has risen by 11pc in the last two weeks compared to the same period in 2019.
The number of sales agreed has also rebounded, the data found, with the figures for the beginning of the year now only 11pc down on the same period in 2019. This compares to 15pc down earlier in the year, and 30pc lower in the aftermath of the mini-Budget.
Improving market conditions have also been supported by a reduction in average mortgage rates. A homebuyer taking out a five-year fixed-rate mortgage with a 15pc deposit would now be looking at an average rate of 4.8pc, compared with 5.9pc in October.
This reduction in mortgage rates may have played a role in the recent increase in buyer demand, Rightmove said.
Matt Thompson, of Chestertons estate agents, said it had seen a 17pc increase in viewings and a 14pc fall in withdrawals in the same period, suggesting “fewer window shoppers”.
He added: “For the remainder of February, as mortgage [deals] have already come down, we expect to see more buyers wanting to capitalise on favourable rates before we enter the spring market which is expected to get more competitive due to pent-up demand.”
Although there is still a shortage of property for sale compared to 2019, with available properties to buy down by 24pc, there is more choice for buyers than a year ago, according to Rightmove’s figures.
The number of available homes for sale is up by 48pc on the record low levels of last year, the website found. Sales agreed figures also showed that the first-time buyer sector is recovering better than the discretionary upper-end sector.
Tim Bannister, of Rightmove, said that the combination of sellers being more realistic on price and an improving picture of the number of sales being agreed upon suggested a “softer landing” for the market than many expected.
He added: “Homeowners who are coming to market in the upcoming spring season should use their agent's expertise and get the price right the first time to find the right buyer more quickly.
“Agents are reporting that they are now increasingly seeing buyers who have more confidence and more choice, albeit with revised budgets to accommodate higher mortgage rates.”
However, Mr Bannister said some first-time buyers would still be priced out of their original plans and “may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets”.
