House price growth slows as buyers ‘take note of economic headwinds’

The average price of a home coming to market this month rose by just 0.2% to £366,247, according to data from Rightmove.

This was lower than the average increase of 1.2% for this time of year.

It showed that many new sellers are “taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels last seen in the pre-pandemic market of 2019”, the property website said.

The number of sales agreed was similar to the number seen during the same period in 2019 but homes are generally selling more quickly than they were then, it added.

Tim Bannister, Rightmove’s director of property science, said: “Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt spring buyers with a competitive price.

“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace.

“Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.

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“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling 12 days more quickly than at this time in 2019.”

First-buyer homes hit record price high

The average price tag on a first-buyer home hit a record high of £224,963 in April, however, after edging up by 0.2% month-on-month.

Agreed sales in this sector were running around 4% higher than the same period four years earlier, partly due to first-time buyers trying to escape rising rents.

Mr Bannister said: “The first-time-buyer sector typically accounts for over a third of all sales, which are often the start of chains, so these positive sales agreed figures are good for the health of the whole market.

“The current multi-speed market is highlighted by sales of larger homes continuing to lag behind, with some sellers in the upper sectors likely needing to show a greater degree of pricing restraint to attract buyers in this much more price-sensitive market.

“More competition amongst lenders in the smaller deposit, higher loan-to-value ranges is positive news for those would-be first-time buyers who have saved up their deposit and can still afford to move.

“However, it remains a challenging environment to get onto the ladder, with new record average asking prices and higher borrowing costs to budget for than a year ago.”

‘A real turning point’

Rightmove’s report also quoted the views of estate agents.

Karl Tatler, managing director at Wirral-based Karl Tatler Estate Agents, said: “The beginning of the spring market has been a real turning point, after a difficult start to the year and following the turbulence of the last three months of 2022.

“Listing figures are comparable with last year, while viewing figures are down only slightly, which given the exceptional market of last year is quite remarkable.”

Ben Rose, director at Lancashire-based Ben Rose Estate Agents, said: “We’re seeing locally that the number of new instructions and sales agreed is the highest it has been for several months, and while this is not the very high level they were during the pandemic years, they are high compared to before the pandemic.”