UK property asking prices jump amid strong buyer demand

property Pic shows: London house prices  View from North London of the City skyline with terraced houses in the foreground  Pic gavin rodgers/pixel8000 24.5.23
The number of property sales being agreed is now 13% higher than at this time last year (Gavin Rodgers)

Average asking prices for houses hitting the market rose to £368,118 this month, according to the latest data from Rightmove.

The data, which looks at the prices of newly-listed homes, reported a 1.5% rise in March. This means the typical asking price has risen by £5,279 from the previous month.

This month’s 1.5% price growth is higher than the average historic March increase of 1%, and the biggest monthly increase in prices for 10 months. However, average asking prices are still £4,776 below the May 2023 peak.

“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,” said Rightmove’s director of property Tim Bannister said.

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Since the beginning of March, the number of sales being agreed is 13% higher than at the same time last year. Leading these higher sales agreed numbers is the less mortgage-rate-sensitive, top-of-the-ladder sector, where agreed sales are now 18% higher than last year.

It is the largest homes sector driving more people to get in touch with estate agents than at this time last year. In March so far, buyer demand for top-of-the-ladder properties is 12% higher than the same period last year, compared with 8% higher overall for all property types.

London has seen the biggest increase in buyer demand, both overall and for top-of-the-ladder properties, compared to this time last year.

The average time to find a buyer is now 71 days, which is the longest at this time of year since 2019. Agents report that buyers are quickly cherry-picking attractively priced properties, whilst over-priced properties are taking much longer, pushing the average time to find a buyer up.

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“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,” Bannister added.

The average five-year mortgage rate is now 4.84% compared to 4.64% five weeks ago, which makes getting on the housing ladder a challenge.

Marc von Grundherr, director of Benham and Reeves, said: “While base rate holds have certainly helped to stabilise the market, high mortgage rates have continued to limit buyer purchasing power across the capital, with London home to the highest average house price of all regions."

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