Rightmove Shows Positive Growth in UK Property Market During Spring

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Prices, Sales & Activity All Increasing the UK Housing Market

More sellers are entering the market, showing a 12% increase from a year ago. Additionally, according to the latest Rightmove House Price Index, the number of agreed sales has risen by 13%.

The most significant growth in activity is occurring in the high-end housing market. New sellers in this sector have increased by 18% compared to last year, while the number of agreed sales has surged by 20%.

Let’s look at the HPI in more detail and see what it means for buy-to-let property investments.

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What Does Rightmove Say About UK Property Prices & Supply?

Thursday, March 28, marked the highest influx of new sellers in a single day in 2024 and the third-highest since August 2020, indicating that the property market is in a much stronger position than it was throughout 2023.

According to Rightmove, the average asking price for properties entering the market has increased by 1.1% this month, totalling £372,324, just £570 shy of the record set in May 2023. The annual price growth rate also stands at +1.7%, marking the highest level in 12 months.

The significant growth towards an almost record-breaking average price is primarily attributed to the high-end housing market, which is experiencing its most robust price growth start to the year since 2014.

However, Rightmove emphasises that the market remains sensitive to prices and operates at varying speeds. Prices and activity are rising more gradually in sectors reliant on mortgages, such as first-time buyers and second-steppers.

“The top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates and more equity rich, contributing to their ability to move,” says Tim Bannister from Rightmove.

“While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and stable house prices, others will be more impacted by cost-of-living challenges and stickier than expected high mortgage rates. Despite these factors, it has been a positive start to the year in comparison to the more muted start to 2023.

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What Does Rightmove Say About Buyer Activity in the UK Housing Market?

In contrast, activity is increasing at a slower pace, primarily for first-time buyers and second-steppers who heavily rely on mortgages.

The number of new sellers in both segments has risen by 10%, while the increase in agreed sales is more modest, up by 9% and 13%, respectively, compared to last year. This slower growth is likely influenced by persistently high mortgage rates, which have remained elevated longer than anticipated earlier this year, particularly affecting those looking to move within these sectors.

Despite the more challenging conditions for buyers, the total number of agreed sales has reached the same level as in 2019. However, this comes amidst significantly higher mortgage rates, averaging 4.84% compared to 2.45% in April 2019 and a notable 22% increase in average property prices. Nonetheless, average wage growth of 27% over this period has somewhat offset the affordability challenge, slightly outpacing house price growth.

Rightmove cautions that a market slowdown may be on the horizon for various reasons. This is a good reason to look at how to generate passive income ideas.

Bannister continues: “The summer holidays are typically a time of distraction for some home-hunters, as they temporarily pause their search and head abroad or to the British seaside.

“In addition, the Euro 2024 football tournament and the Olympics this summer, likely followed by a General Election during the second half of the year, will add more buyer distractions than usual. There appears to be a tempting window of opportunity for those who are considering a move to act now before these distractions arrive.

“While affordability is still very tight, property and mortgage market conditions remain stable, buyer choice is good, and many sellers will recognise that it is the right time to negotiate on price to agree a deal. The boost in activity suggests that many home movers are already springing into action to make their move.”

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Rightmove Shows Positive Growth in UK Property Market During Spring