The latest news on the UK property market is that it has started the year in a better place than expected, with asking prices increasing by 0.9% or around £3301 for a typical home in January, according to Rightmove.
Coming on the tail of two months of decreased pricing towards the end of 2022, could this mean that green shoots are being sown for UK house price growth in 2023?
While new seller asking prices remained flat in February with 0% growth, buyers are remaining optimistic, with an increasing number returning to the market. Moreover, the average asking price for first-time buyers increased 0.3%, and for second-steppers it increased 0.7%. It was “top of the ladder” asking price growth that dragged the overall monthly figure down.
According to Rightmove, the average asking price for a property in the UK is now £362,452 (as of February). Despite this increase and other positive signs, it’s important to note that prices are still lower than they were at the start of 2022—which saw an annual decline of 1.2%.
A spokesman for the online property portal said:
After two consecutive months of asking price falls, the market has bounced back in January with a gain that is higher than our forecast. Sellers are often keen to get their properties launched at the earliest opportunity after Christmas, and it looks like that enthusiasm has had a positive effect on prices.
Indeed, Rightmove’s data shows that nearly three-quarters of the UK is seeing asking prices rise in some areas—with Wales showing the highest increase at 1.8%. The South East and East Midlands saw increases of 1%, while London recorded a smaller but still positive increase of 0.5%.
But with the UK property market exceeding expectations at the start of the year, what can we expect to see throughout 2023?
Recovering confidence
The start of the year is traditionally a busy time for UK estate agents, with many vendors choosing to put their property on the market after the Christmas break. However, this year, Rightmove recorded that on 5th January, the number of people sending a request to an estate agent to value their home was the third largest on its records—showing a real increase of selling activity.
However, despite increased interest from vendors looking to sell, it is still very much the case that demand is outstripping supply which, in turn, can still lead to rising prices.
Confidence amongst purchasers and vendors alike appears to be recovering, with buyers continuing to search for their new home despite economic uncertainty and vendors becoming bolder in setting asking prices that reflect the market reality.
Improving mortgage deals
In the shadow of rising interest rates, the number of households taking out mortgages fell from October last year. On October 24th 2022, Natwest’s five-year fixed rate with 15% deposit was 6.39%. By February 2nd this year, the equivalent rate had been cut all the way down to 4.58%.
As better deals return to the high street banks, despite the potential for the Bank of England to raise interest rates, it’s more likely that both first-time buyers and those looking to make the next step on the property ladder will return to the market. However the incredibly rapid growth of the past few years is likely to slow as the cost of living crisis continues to bite.
All in all, the latest news shows that the UK property market has got off to a great start, perhaps indicating slow but steady growth across 2023.
Contact us today to discover our available UK properties.
