Key indicators show a year that has so far been better than many predicted following the turbulent end to 2022
The UK housing market has had a better 2023 than many predicted, and sellers are continuing to adopt more pricing realism to attract a buyer, reports Rightmove in its latest House Price Index report, published today, November 13th.
“The market is resilient”
Commenting on the report, Ian Preston, Co-founder of Preston Baker Estate Agents, said: “The market is resilient and more in favour of buyers compared to the past two years. Pricing right is the most important tool for potential sellers at the moment. We have seen several sellers try to test the market with an over-optimistic price to qualified buyers. However, the consequences of getting it wrong are pronounced, with the data showing that many sellers who don’t get the price right the first time end up wasting a huge amount of time and money.”
Rightmove reports that average new seller asking prices have dropped 1.7% (-£6,088) this month to £362,143, as Christmas approaches and sellers price more realistically to win a buyer.
It says that although the move from the frenzied market of the pandemic back to more normal activity levels has been slow, key indicators show a year that has so far been better than many predicted following the turbulent end to 2022.
Pricing correctly first time remains key
It reports that:
- Average asking prices are only 3% down on May’s peak, but pricing correctly the first time remains key to winning a buyer.
- Sales agreed now stand at 10% below 2019’s more normal market level, up from 15% below last month.
- The pandemic-driven shortage of stock is over, with the number of available properties for sale now only 1% below 2019.
However, some areas and market sections continue to transition better than others to the need for more attractive pricing:
- The amount of sales being agreed for studio, one-, and two-bedroom properties is only 7% down on 2019’s level, compared to four-bedroom detached houses and all five-bedroom plus properties, where sales agreed are 14% below 2019.
- While there are yearly price drips in the Midlands and all Southern regions, in contrast Wales, Scotland and the North of England have seen increases in the price of newly-marketed properties.
Tim Bannister, Rightmove’s Director of Property Science, said: “We’d expect to see a drop in new seller asking prices in the last couple of months of the year, as serious sellers start to separate themselves from discretionary sellers and cut through the Christmas noise with an attractive price to secure a buyer. However, the larger than usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers heed their agents’ advice and come to market with more enticing prices to stand out from their over-optimistic competition. Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates. It now looks like more sellers are understanding Rightmove’s research; that the chances of securing a buyer are much greater if they price right the first time, rather than over-pricing and reducing their price later.”
Mortgage guarantee scheme
Last week, the Bank of England opted to hold the Base Rate for the second consecutive time, which has supported buyer demand and helped to keep it in line with 2019’s level. Now, many will be looking to the forthcoming Autumn Statement for any policy announcements or market incentives. One rumoured announcement is a renewal of the mortgage guarantee scheme, which encourages lenders to offer a 95% loan-to-value mortgage helping those with a smaller deposit. However, data from the Bank of England and the Financial Conduct Authority (FCA) shows only around 5% of mortgages taken out are of this kind, highlighting the limitations of the scheme.
Tim Bannister said: “This year has brought many new challenges for buyers, sellers and agents to navigate. While there have been many twists and turns, and there are still seven weeks left of the year, the data indicates that there has been more to be positive about in 2023 than many thought there would be at this time last year. The upcoming Autumn Statement will now set the tone heading into 2024, particularly if there are any major policy announcements. We hope that the government has considered the impact on the market of any new policies, and that any measures introduced help as many movers as possible. An announcement as limited as a mortgage guarantee scheme renewal would be a missed opportunity to provide some support to movers, particularly first-time buyers.”
Ian Preston commented: “Record rents have made it difficult for would-be first-time buyers trying to save up their deposit and get onto the ladder from the rental market. Meanwhile, higher interest rates and the increased tax and legislative burdens to landlords, have led to some private landlords exiting the private rental market. Incentives are needed to encourage more private landlords back into the market and improve supply – landlords are not the problem, more investment and properties available to rent is the solution to reducing rents.”
Thinking of moving? Preston Baker will help you get the best outcome
In the current price-sensitive market, your choice of estate agent is vital to success.
Price correctly in the first instance and you will secure the best outcome.
If you would like a free valuation of your property, book one now with Preston Baker.