Homebuyer demand is on the up

  • Following two months of falls, average new seller asking prices rose by 0.9% in January 2023. This is the largest rise in prices at this time of year since 2020 and is indicative of sellers testing the market.
  • Rightmove are also reporting other signs of positivity in the market, although they acknowledge that it is early days. The week to 16th January 2023 has been the busiest for valuations since August 2022.
  • Notably, buyer demand is up by 4% compared to the same period in 2019 and 55% compared to the two weeks before Christmas. This is the biggest new year bounce since 2016.
  • Mortgage rates also continue to fall as interest rates soften, with some deals for first-time buyers now below 5%. It is a trend which is expected to continue and should encourage this segment of the market to become more active.Source: Dataloft, Rightmove, MoneySuperMarket

Following on from two months of house asking price falls, we are starting to see a rise in seller asking prices – the largest we have seen since 2020.

Interest rates had hit as high as 6.5% for some borrowers, however, some of the major high street lenders have started to lower their interest rates with many others now following suit. With rates generally sitting below 5% and looking set to remain in the 4-5% range in 2023, this is a much better prospect than levels at the end of 2022.

With the rates starting to fall, we are seeing sellers taking advantage and increasing their asking prices and trying their luck. The lack of supply in the market also appears to be reversing with many agents now reporting higher instruction numbers. This will not only provide more choices for prospective purchasers, but it will also reduce the pressure on prices.

The growing pressure on incomes, alongside the costs of running homes, is also likely to drive movement in the market in 2023. Large amounts of embedded equity in millions of homes may also encourage more downsizing to release equity and cut running costs – further supporting home moves in 2023. 

Leigh Thomas -Truuli Property Expert

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