Housing Market Sees Surge, Nearing Record Prices

The British housing market is experiencing a notable uptick, with the average asking price of homes rising by 1.1% since March to reach £372,324. This increase is typical for this time of year and brings average prices tantalisingly close to their all-time high of £372,894, reached in May 2023.

Driving this surge are primarily the 'top-of-the-ladder' homes, including spacious four-bedroom detached houses and properties with five or more bedrooms. These properties have witnessed the strongest price growth start in a decade.

The recent activity in the higher end of the market can be traced back to the aftermath of the September 2022 mini-Budget, which saw a sharp rise in mortgage rates, causing some potential buyers to postpone their plans. However, there has been a release of pent-up demand in this sector, with a significant increase in both the number of sellers listing their larger homes (+18%) and the number of sales agreed (+20%) compared to the same period in 2023.

Rightmove property expert Tim Bannister, notes that the top-of-the-ladder sector continues to be the driving force behind pricing activity, as buyers in this segment are less sensitive to mortgage rate fluctuations and often have more equity, enabling them to move more easily.

Conversely, first-time buyers, often seeking higher loan-to-value mortgages with higher rates, face greater challenges. However, there is overall stability in the mortgage market currently, with fewer fluctuations in rates, which has encouraged more activity.

Over the past year, average asking prices experienced a marginal decline in the second half of 2023 but have since rebounded, now standing 1.7% higher than the previous year. This resurgence in prices is attributed to increased market activity, as sellers feel less pressure to lower their asking prices.

With the bustling spring market, many prospective movers are considering now as an opportune time to make their move, particularly before the quieter summer months and amidst potential distractions like the Euro 2024 football tournament and the upcoming Olympics. Tim advises that there appears to be a window of opportunity for those contemplating a move to act before these distractions potentially impede market activity.

Sources from Rightmove.