Rightmove: sellers take a punt on higher asking prices

Sarah Coles, head of personal finance at Hargreaves Lansdown, comments on the publication of the Rightmove House Price Report for March, showing sellers take a punt on higher asking prices.

Key points from publication:

• • In mid-March, average asking prices were up 0.8% in a month to £365,357. Typically they rise 1% in March.
  • They were up 3% in a year, down from 3.9% in February, and prices are down £5,800 from the peak in October.
  • In the past month, growth has been driven by a 1.2% rise in the most expensive properties – but sales of these properties are 10% behind the same period in 2019 – and 13% behind second-stepper homes.
  • Buyer demand was 6% higher than the same period in 2019.
  • The average estate agent had 43 properties on the books – similar to a month earlier.

Sarah Coles says:

“Sellers are taking a punt on higher asking prices. They’re hoping falling mortgage rates and the spring selling season will support some fairly optimistic pricing – particularly at the pricier end of the market.

“Unfortunately, there are a few signs that some of this confidence may be misplaced, and that they may well need to do a deal to secure a sale.

“Asking prices remain pretty punchy, up 3% in a year. This has been driven by asking prices for larger properties – which are up 1.2% in a month.

“However, this end of the market isn’t shifting as fast as it did in the same period in 2019, or as fast as slightly smaller homes. It’s a reasonable indication that they may not quite achieve these prices.

“This is even more likely when you consider Zoopla’s findings that home sellers are cutting prices by an average of £14,100 – or 4.5% to shift their properties.

“First-time buyer property prices look more robust – with prices down just £500 from the peak, and the number of sales down 4% from the same period in 2019.

“However, with affordability so stretched in this corner of the market, an awful lot will depend on mortgage rates continuing to fall back – something which is far from guaranteed.

“On the flip side, there is some real hope to be gained from the fact that demand is now higher than just before the pandemic.

“Lower mortgages rates may well be persuading more people to dip their toe back into the property market, which in turn could mean price falls aren’t as brutal as had been expected.

“However, demand remains fragile, and given the uncertainty over the trajectory of the mortgage market, this is not a time to get carried away.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay