Stronger buyer demand and sales as market marches into Spring

• The average price of newly marketed properties rises by 1.5% (+£5,279) this month to £368,118, higher than the historic average March increase of 1.0% and the biggest for 10 months as the market continues its recovery after a muted 2023.

• The positive start to the year continues, paving the way for a greater number of home purchases than last year:

• With average asking prices still £4,776 below the May 2023 peak, more are seeing a window of opportunity to buy.

• The number of sales being agreed is now 13% higher than at this time last year.

• Buyer demand is now 8% above last year, led by the less mortgage-rate-sensitive larger homes sector and London.However, despite a better-than-expected start to the year, the market remains sensitive to pricing and external events:

• Rightmove’s real time data shows the growth in buyer demand was tempered somewhat by a lacklustre Spring Budget, with no direct help for first-time buyers or mortgage market innovations.

• The average time to find a buyer is 71 days, the longest at this time of year since 2019. Attractively priced properties are quickly being cherry-picked, but over-optimistically priced sellers are taking longer to find a buyer.

• The average 5-year mortgage rate is now 4.84% compared to 4.64% five weeks ago, as rates edge up to higher levels.

Affordability trends

The first-time buyer monthly mortgage payment is based on Bank of England data of the averages for 90% LTV two year fixed mortgages from lenders, and the average asking price of a typical first-time buyer home (two bedrooms or fewer) using our partners Rightmove House Price Index. The equivalent monthly rent is calculated using the same property types (two bedrooms or fewer). The affordability to buy a first home is based on the Average Weekly Earnings (AWE) dataset from ONS multiplied by 4.5 to get the typical maximum that a person can borrow from a lender. The average asking price of a typical first-time buyer home is taken from the Rightmove House Price Index.

Price & activity trends

Regional trends

Overview

The average price of property coming to the market for sale rises by 1.5% (+£5,279) this month to £368,118, as the market continues its recovery after a muted 2023. The positive start to the year continues, with Rightmove recording an increase in buyer demand, measured by people sending enquiries to estate agents, and stronger sales numbers than a year ago. This, alongside the usual Spring optimism, has put upwards pressure on prices. This month’s 1.5% price growth is notably higher than the average historic March increase of 1.0%, and the biggest monthly increase in prices for 10 months. However, average asking prices are still £4,776 below the May 2023 peak and the increase in buyer activity suggests that more are seeing a window of opportunity to buy. Higher activity at the start of this year compared to last year must also be looked at in the context of the more cautious start to 2023. Rather than the start of another market surge, the signs are that overall activity levels have now returned to steadier pre-pandemic norms. However, the elevated level of mortgage interest rates mean that the increased activity is skewed towards those buyers who are less sensitive to higher mortgage costs.

Since the beginning of March, the number of sales being agreed is 13% higher than at the same time last year, continuing to pave the way for a higher number of transactions this year than the one million in 2023. Leading these higher sales agreed numbers is the less mortgage-rate-sensitive, top-of-the-ladder sector, where agreed sales are now 18% higher than last year. It is also this largest homes sector which is driving more people to get in touch with estate agents than at this time last year. In March so far, buyer demand for top-of-the ladder properties is 12% higher than the same period last year, compared with 8% higher overall for all property types.

London has seen the biggest increase in buyer demand, both overall and for top-of-the-ladder properties, compared to this time last year. The return to the office, wage increases, stable house prices and the slowing of inflation have all played their part in increasing buyer interest in living in the capital again. However, agents report that despite this better-than-expected start to the year, the market is still sensitive to pricing and external events. For example, last week’s lacklustre Budget, with not one measure announced to directly support first-time buyers or help the mortgage market, has tempered the growth we were seeing in buyer demand. Rightmove’s real time data shows an immediate pause in interest from some buyers following the Budget, in response to the disappointing scarcity of housing announcements. The average time to find a buyer is now 71 days, which is the longest at this time of year since 2019. Agents report that buyers are quickly cherry-picking attractively priced properties, whilst over-priced properties are taking much longer, pushing the average time to find a buyer up . Meanwhile after several weeks of creeping rate rises, the average 5-year mortgage rate is now 4.84% compared to 4.64% five weeks ago, continuing to test buyer affordability