April house price increase lower than usual

Average property prices in the UK went up by 0.2% in April month-on-month, lower than the 1.2% average for this time of year, according to Rightmove. 

Prices rose £890 this month from March, pushing the average cost of a house up to £224,963, the online property agent concluded. 

Rightmove said agreed sales have improved since last September, when they plunged by 21% after the disastrous mini-budget, and are more like pre-pandemic levels of March 2019. The improvement has been mainly led by the first-time buyer sector - two bed homes or fewer - with sales of these types of property 4% higher than in March three years ago.  

Sales agreed overall nevertheless remain 18% behind last year’s market. The April price increase was down from the 0.8% month-on-month bump seen in March, and represented a rise of 1.7% from April last year, according to Rightmove. 

“First-time-buyer type properties have reached a new record price of £224,963 this month, which may appear surprising given the economic headwinds that have made taking out a mortgage more expensive and saving up for a deposit even more challenging,” Rightmove said in its monthly price index. 

“However, solid buyer demand in this sector which is now 11% higher than in the same period in 2019, illustrates the continued strong desire from would-be first-time buyers to own their own home.”

Although, Rightmove found sales agreed in the ‘second-stepper’ sector was 4% behind March 2019 levels, and 3% behind the top-of-the-ladder sector.

The data came as Savills released the results of a survey showing commitment among prime buyers and sellers this month has improved. A net balance of +28% in the estate agent’s survey said they were looking to move in the next three-to-six months, up from a net +7% in November last year. Savills’ survey showed that upsizers (+26%) and downsizers (+34%) were the most committed to move over the next three-to-six months, which compared to -1% and +7%, respectively, when asked in November.

Frances McDonald, director of residential research at Savills, said: “This is a significant shift in sentiment after the marked dip in confidence we saw towards the back end of last year.

“While this increased optimism has yet to translate into more mortgage approvals, it’s a good sign that the market is moving in the right direction.”

Savills’ survey noted “higher interest rates and wider market uncertainty are expected to dominate the market in 2023” but added the findings pointed “to a more positive attitude towards budgets and financing”.

The Nationwide showed the housing market was slowing March, although the building society suggested annual house prices fell, rather than rose, by more than 3%. While Zoopla figures indicated that the housing market was “defying expectations”.

Tim Bannister, Rightmove’s director of property science, said sellers had realised they now need to tempt buyers with competitive prices. “Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt Spring buyers with a competitive price,” he said. 

“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace.”

But Bannister warned: “Those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.”