Housing Market Sees Spring Surge in Prices and Sales

As the UK housing market enters spring, it experiences a notable increase in buyer demand and sales, leading to a significant rise in the average price of newly marketed properties. This month, the average price has surged by 1.5% (£5,279) to £368,118. This increase surpasses the historic average for March and marks the largest growth in the past ten months, signaling a robust recovery following a quieter 2023. The market’s buoyancy is underscored by a 13% rise in the number of sales agreed compared to last year, alongside an 8% boost in buyer demand, with larger homes and the London market showing particular strength.

Challenges and Opportunities
Despite the optimistic start to 2024, the market’s progress is nuanced, influenced by external factors and pricing sensitivity. Rightmove highlights the impact of the recent Spring Budget, which, due to a lack of direct support for first-time buyers or mortgage market innovations, has somewhat cooled the initial surge in buyer demand. With the average time to find a buyer stretching to 71 days, the longest since 2019, the market’s dynamics underscore a selective buyer approach, gravitating towards competitively priced properties.

Tim Bannister, Rightmove’s Director of Property Science, reflects on the current state, noting, “March is typically a strong month for asking price growth… However, the stronger than usual price growth this March indicates that new sellers are feeling much more confident.” Bannister’s statement highlights a cautious optimism, tempered by the reality of elevated mortgage interest rates affecting affordability for many prospective buyers.

An Insight from Industry Experts
Nathan Emerson, CEO of Propertymark, adds perspective to the evolving market, expressing hope for continued growth amidst economic stability. The increase in new property listings and market appraisals signals a rising confidence among buyers and sellers, suggesting a return to more typical market conditions after years of uncertainty.

In London, the market’s resilience is particularly notable, with high buyer activity across all price ranges, especially in the super-prime sector. Marc von Grundherr, Director of Benham and Reeves, points out that while mortgage affordability remains challenging, it hasn’t dampened the enthusiasm of London buyers, indicating a robust demand for high-end properties despite the higher borrowing costs.

Market Outlook
As the housing market navigates through spring, the interplay of buyer demand, pricing strategies, and external economic factors will continue to shape its trajectory. With indications of a shift towards more balanced market conditions, the current phase presents both challenges and opportunities for buyers and sellers alike, highlighting the importance of realistic pricing and market adaptability in achieving successful transactions.