Biggest monthly house price rise in 10 months
We’ve seen some positive activity in the housing market at the beginning of the year, and we’re seeing this continue as we head into the Spring months.
This month, prices of properties coming to market have risen by 1.5% on average nationally, to £368,118 – considerably higher than the usual March rise of 1.0%. It’s also the biggest month-on-month increase we’ve seen in 10 months.
Price changes can be a good indicator of how confident sellers are feeling when they put their homes on the market. Muted activity levels and lots of sustained monthly asking price falls can be an indicator of a slower property market, as new sellers may feel they need to lower their asking prices to achieve a sale, particularly when there’s a smaller pool of buyers.
This month’s increased activity is a sign that the market continues to improve after a subdued 2023. Buyer demand is up by 8% compared to the same time last year, while the number of sales agreed is 13% higher. Our property expert, Tim Bannister, says:
“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.”
This increased activity is a positive sign for the property market, and paves the way for a higher number of transactions to take place in 2024. But buyers are still very price sensitive, and are taking their time to find a home that’s right for them, especially with the backdrop of higher mortgage rates, and affordability continuing to be stretched. This is all translating to homes being on the market for longer periods on average, and the time it takes to sell is the longest it’s been at this time of year since 2019 (71 days).
The guidance to those thinking of putting their homes up for sale soon is to listen to the advice of their local estate agents, who will be best placed to help with setting the right asking price, based on what’s happening in your local market. You can read more about what’s happening to house prices in your local area in our monthly House Price Index, or to get an idea of how much your home could be worth, why not get an instant valuation.
What could happen next in the housing market?
We’re able to get an up-to-date view of what’s happening in the housing market, as we can see changes in activity in real time. After weeks of speculation in the lead up to the Spring Budget on 6 March, the measures announced were likely to apply to only a small number of buyers and sellers. This then led to a sudden pause in activity in the immediate aftermath of announcement. Tim adds:
“It’s been a positive first three months of the year for the market and better than many anticipated. However, we know from last year how quickly the picture can change with some negative economic news or surprises, evidenced in Rightmove’s data which captured the immediate buyer reaction to the lack of major housing initiatives in the Spring Budget.”
“Sellers are right to feel more confident and optimistic this year, but buyer affordability remains stretched and higher mortgage rates are an ongoing challenge. With the market still sensitive to pricing and external events, some caution and willingness to negotiate is advised for sellers who are keen to find a buyer in the Spring market.”
This week sees the release of the February inflation data, as well Bank of England’s next interest announcement: both of which could impact the future direction of mortgage rates. You can check the current average rates here, which we update weekly, along with commentary from our mortgage expert, Matt Smith.
The header image for this article is provided courtesy of Intercounty, Great Dunmow.
