The latest data and analysis from Rightmove has shown that, despite current market uncertainty, families are doing housing deals as housing needs take priority.
According to Rightmove's figures, the price of new-to-the market properties was up by an average of 1.1% or £3,447 this month. This is the biggest month-on-month rise for over a year and the largest at this time of year since 2016.
It is usual for properties coming to the market at this time of year to see a price rise as the spring moving season gets under way, but this month’s uplift is the highest in April since 2016 and the largest monthly rise seen since March 2018. The uncertain political backdrop continues to hold back the market, with new seller asking prices, the number of properties coming to market and the number of sales agreed all below this time last year. But despite these headline falls, market activity remains resilient with would-be buyers and sellers still having housing needs to satisfy, especially in the family home sector.
Miles Shipside, Rightmove director and housing market analyst, had this to say: “The rise in new seller asking prices reflects growing activity as the market builds momentum, egged on by the arrival of Easter. Some sectors of the market and some parts of the country have strong buyer demand and a lack of suitable supply. However, on average, properties are still coming to the market at slightly lower prices than a year ago. It’s one of the most price-sensitive markets that we’ve seen for years, with buyers understandably looking for value or for homes with extra quality and appeal that suit their needs.”
The family home sector made up of three and four-bedroom properties (excluding four-bedroom detached) is outperforming other sectors in the key metrics. Families’ housing needs, often driven by the need for more space or proximity to schools, are outweighing the ongoing political uncertainty. These properties are holding their value better than other sectors, coming to the market at asking prices 0.7% on average higher than a year ago compared to the national average fall for all properties of 0.1%. Owners of this type of property are also slightly more willing to come to market, with 0.7% more new sellers than this time a year ago, compared with a 1.2% fall in new-to-the-market sellers nationally. Finally, this sector is more likely to sell, with the number of sales agreed down by just 0.4% compared to this time last year, while the national average drop is 1.6%.
Shipside adds: “Properties in this middle sector offer the ideal escape route to families looking for more bedrooms, more space and their choice of schools. They are often second-steppers out-growing their first property and it gets harder to postpone a move with growing children. They may have already delayed for a year or two waiting for Brexit clarity, and understandably their patience is wearing thin. While some movers are awaiting the outcome of deal or no deal, many families are keeping on dealing in the housing market.”
The EU’s offer of a Brexit extension until October coincides with what is usually the busiest moving season. While it is only a postponement, it lasts for long enough to relieve some of the short-term uncertainty, and so it arrives at an opportune time for the housing market.
Shipside observes: “No doubt there are still a lot of twists and turns to come, but this extension could give hesitating home movers encouragement that there is now a window of relative certainty in uncertain times. We are not anticipating an activity surge, but maybe a wave of relief that releases some pent-up demand to take advantage of static property prices and cheap fixed-rate mortgages. This demand is clearly there as March was Rightmove’s busiest ever month with over 145 million visits to the site.”
Bruce King, Director of Cheffins estate agents in Cambridge says: “Whilst the 2018 market definitely was not all doom and gloom, 2019 has certainly seen a new vigour. Whilst activity and the actual number of sales is still lower than this time last year, the number of active buyers within the market has increased which has helped to contribute to price rises for the best properties available. We’re certainly seeing an uplift in activity as we come into the spring and summer months.
The best way to describe the sentiment in the market at the moment is ‘bored of Brexit;’ fed up with sitting on their hands, sellers are now looking to get on with their lives and move house and buyers are looking to secure somewhere new. People’s reasons for moving are still as relevant now as they ever were and buyers in the market still need to upsize, downsize, move locations, move into school catchments and so on and we are seeing that they are now returning to the marketplace as they realise that they can’t keep putting life on hold. Families in particular have been most active in the market over the past few months with house moves driven by schools, job relocations or upsizing.”
Nick Leeming, Chairman of Jackson-Stops, comments:”With Brexit delays becoming somewhat of a blur, buyers across the country are getting back to business as usual and are re-establishing the search for their dream home. However, with demand currently far outweighing supply, buyers, particularly those in the family homes market, have become frustrated at the lack of new homes coming to market. This greater competition has resulted in upward pressure on prices, so it is perhaps not surprising to see today’s data showing a greater monthly price increase. The early bird gets the worm and now represents an ideal time to buy if you are upsizing. Properties that are well-priced and of a high-quality are being snapped up quickly and we expect that to continue as we head into the busier, warmer months ahead.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "On the face of it, the Rightmove increases look fairly spectacular but asking prices are rising due to a shortage of stock - this is down to supply and demand.
When you look beyond the numbers it is apparent that they include the 50 per cent of homes that don’t sell as well as those that do. Asking price is a marketing tool, not a valuation, so this is a useful guide to market movements, not least because the survey is now long-established and around 90 per cent of all estate agents subscribe to it."
Andy Soloman, founder and CEO of Yomdel, commented: “While it is important to take any data based on monthly asking price trends with a fair pinch of salt, an increase in market activity is consistent with seasonal trends seen at this time of year.
It would seem continued defiance by sellers to accept current market conditions is resulting in asking price trends climbing ever higher, however, the positives to take are a return of stock hitting the market and a reduction in the time it’s taking to sell. We’ve been highlighting for some time that for those buying a home, rather than an investment, Brexit uncertainty isn’t the deterrent that it has been portrayed as, with the strong performance of the family home sector providing clear evidence of this
With yet a further delay now confirmed, this buoyancy should start to return to other areas of the housing market for the next six months at least.”
Alastair McKee, Managing Director of One77 Mortgages, had this to say: “We’ve seen a strong uplift in mortgage approvals over the first quarter of the year and I think we’re starting to see this come full circle as sellers once again enter the fray to take advantage of this growing buyer demand and secure a higher price than they may have last year.
While there is still a slight reluctance to price according to current market conditions, this growing demand and lack of suitable stock means now is as good a time as any to secure that little bit more for your property in what are otherwise tough market conditions.
I think it’s fair to say that the family sector has always been one of, if not the strongest pillar of the UK housing market. The main driving factor behind this sector's performance at present is the fact that many are buying to put a suitable roof over their family’s head, and so Brexit doesn’t really come into it.
As it stands, the market remains in rather good health considering and as the average home buyer and seller grows weary of yet more delays around Brexit, we should see momentum build spurred by the seasonal market uplift that comes with this time of year.”