While many predicted doom and gloom for the housing market this year, Rightmove’s latest house price survey says that asking prices increased in March.
Despite a nervous start to 2023, the housing market has remained resilient. Property website Rightmove has revealed that asking prices increased by 0.8% in March. The website’s latest house price survey showed asking prices jumping by an average of £2906, mainly due to the costs of larger homes. The average property asking price is now £365,357.
Rightmove said the market was recovering from the spike in borrowing costs in the last quarter of 2022 when the former Chancellor Kwasi Kwarteng unveiled his mini-budget, which caused significant uncertainty in the financial markets. As a result, mortgage rates increased to about 6.5% last October but are now around 4 to 5%.
Stable property market
While Rightmove’s director, Tim Bannister, says that higher mortgage rates and economic headwinds can pose challenges, the market seems stable. However, it’s important to stress that there’s a difference between asking and sold prices – and the rise in asking prices doesn’t mean that sellers are achieving their desired prices.
A spokesman for a chartered surveyor firm, Renton & Parr, said increasing numbers of properties were coming to the market. However, some 60% of surveyors who took part in a RICS (Royal Institution of Chartered Surveyors) monthly survey noted that prices were being agreed at below the asking price.
However, transactions have dropped – data from the HMRC show that UK property transactions are down by nearly 20%.
The future of the housing market
So what does the future of the housing market look like for the rest of this year? The Office for Budget Responsibility predicts a 10% fall in house prices, Lloyds and Halifax predict an 8% drop, and Nationwide and Zoopla predict a 5% drop this year. A spokesman for estate agent Knight Frank says that anyone predicting house prices this year should ignore the data from the last quarter of 2022. This makes sense, as the former Chancellor’s mini-budget, which caused chaos in the financial markets, was scrapped.