UK housing market asking price sees record low increase of £14 in February as first time buyers return
The UK housing market has seen a return to normal as we approach the busiest month of the year for property sites.
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As March approaches, so does the busiest time of the year for the UK housing market. The first month of spring sees more Brits search for homes on sites like Rightmove, as well as more properties listed for sale online than any other month of the year.
The increase in both selling and buying usually leads to an increase in housing prices on the market, all because sellers can list their properties for the competitive buyers market. But the February House Price Index remained just about as flat as it can get, with the average housing price increasing by no more than £14, to £362,452 across all of Great Britain, according to Rightmove.
And while the property portal says that this is the smallest increase between January and February that the site has ever recorded, they see it as a sign of a positive housing market for people looking to move this year. It also contradicts the price falls that some experts were predicting this year.
Why have house prices moved so little this month?
Rightmove say the last two years have seen a very uneven housing market, with a lot more people looking to buy a home than properties listed on the market, which have led to the house price growth we’ve seen in recent years. And while there are still more buyers than sellers, we are seeing more properties on the market, and less competition for home buyers, with properties for sale increasing by 48% since last year’s record low.
The more saturated market means home buyers have more time to find the property they want. It also means estate agents urge home-sellers to set a more realistic price in order to find a buyer.
Rightmove property expert, Tim Bannister, says: “The big question this month was whether we’d see new sellers increasing their asking prices, which is what we usually see as we approach the spring selling season. This month’s flat average asking price indicates that many sellers are showing restraint when pricing their homes.
“We’re moving into a slower-paced market. Buyers will take longer to find the right home at the right price due to the higher cost of repaying a mortgage,” he adds.
The market has also seen an increase in home-buyers ready to make a move on the market. Rightmove have seen an 11% increase in enquiries to estate agents in the last two weeks leading up to February 20, compared to the same two weeks in 2019, before the pandemic and the last time the market was “normal”.
Since the chaotic mini-budget in 2022, which saw rates increase rapidly, mortgage rates have once again fallen, prompting more people to buy a home. Data show that someone looking to take out a five year fixed mortgage with a 15% deposit will be facing an average interest rate of 4.82%, down from October’s 5.90%.
Bannister says: “Estate agents are now reporting they’re increasingly seeing buyers who have more confidence and more choice, albeit with revised budgets to accommodate mortgage rates.”
The mini-budget saw first time buyers hit the hardest as mortgage rates rocketed. But as the rates are once again down, it looks like first time buyers are returning to the homes market.
“It’s a positive sign for the housing market to see many first-time buyers getting on with their moves. Average mortgage rates have edged down, but some first-time buyers will unfortunately still be priced out of their original plans. They may need to look for a cheaper property, save a bigger deposit, or factor higher monthly mortgage repayments into their budgets now,” the property expert adds.