House asking prices have surged by more than £5000 in March as the mortgage market recovery uplifts sellers' confidence in property values.
House Asking Prices Surge, but Buyers are Still Cautious
According to figures from Rightmove, the average cost of a newly marketed property surged by 1.5%, reaching £368,118 in the four weeks leading up to March. This translates to a £5,279 rise, which marks the highest increase noted in ten months.
Rightmove highlighted that the month-on-month rise was higher than the usual 1.0% average noted in March but is still sitting £4,776 lower than the May 2023 peak.
Rightmove's director of property science, Tim Bannister, remarked: "Sellers are right to feel more confident and optimistic this year, but buyer affordability remains stretched and higher mortgage rates are an ongoing challenge."
Rightmove's scale of buyer demand rose by 8% in the period stretching from February 11 to March 9th on a year-on-year comparison, and sales noted an annual 13% surge.
Bannister said: “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets under way.
“However, the stronger-than-usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being overoptimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.
“While some sellers are still being overoptimistic 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.”
Signs of caution are still present among buyers, as it takes more than two months for sellers to find a buyer, the longest ever waiting period since 2019.
Mr. Bannister later added: “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.”
London Noted the Highest Housing Demands in March
London noted the biggest surge in housing demands compared with the same period last year, as easing inflation, wage increases, and a push back to offices among workers made the British Capital more attractive.
Marc von Grundherr, director of estate agent Benham and Reeves, highlighted: “While mortgage affordability remains an issue, it certainly hasn’t dampened the appetite of London buyers, and we’ve continued to see a high level of activity at all price thresholds, but particularly across the super-prime market. Buyers at the very top end of the ladder are acting with great confidence, with the higher cost of borrowing not presenting the same obstacle as the average homeowner.
“As a result, we’re seeing high demand for super-prime stock and many more buyers circling due to a more constrained supply of suitable properties in this sector.”
According to Rightmove, the majority of the housing market activity was driven by property sales to wealthy buyers, for whom mortgage loans are not an issue. These types of sales commonly referred to as 'top-of-the-ladder sales' have increased by 18% in March, in comparison with last year during the same period.