Buyer demand is down only -11% compared to 2019 and recovered from the September mini budget even though mortgage rates are higher.
The number of sales agreed has rebounded and is down 11% compared to the same period in 2019 with normal market conditions, according to Rightmove.
Lower demand in the aftermath of the September mini budget resulted in sales falling by -30% and this recovered at the start of year sales agreed down -15% on 2019.
The strongest demand is the hardest hit first time buyers down -7% compared to 2019 and may be due to a higher motivation of buyers to own their home and avoid the high and rapidly increasing rents.
Higher mortgage interest cost
After the mini budget interest rates jumped to a recent high averaging 5.90% in October for a five-year fixed mortgage with a 15% deposit and has since reduced to 4.82%.
This table from Rightmove shows average UK asking prices (excluding inner London) for January and February 2023 for each sector and annual change.
| Sector | May | April |
Change |
|---|---|---|---|
| First time buyers | £222,582 | £223,249 | +3.7% |
| Second steppers | £333,345 | £335,691 | +4.0% |
| Top of the ladder | £656,322 | £650,755 | +4.4% |
Over the year asking prices are higher even with rising interest rates and home movers are paying 4.0% more for an average property with first time buyers paying 3.7% more.
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The monthly asking prices remain flat rising an average of £14 or 0.0% the smallest increase ever recorded from January to February.
There remains a shortage of new properties for sale -24% down compared to 2019 although there are +48% more homes available compared to the record low numbers of last year.
London house prices are higher
Last year London house prices increased 2.2% with strong growth for the borough of Camden up 6.0% last month and 17.2% annually with average property values of £1,159,717.
Other boroughs were popular with buyers such are Barnet with average prices up 8.0% and values of £706,572 and Islington up 7.7% and values of £803,471.
These higher house prices in the capital make it even more difficult for first time buyers to purchase their own home due to the larger deposit required and mortgage affordability.
It does allow the older equity release buyer to access wealth in their property using a lifetime mortgage and giving this to a child or grandchild as a deposit on their first property.
The only borough with lower house prices over the year is Kensington and Chelsea reducing -2.2% and average prices of £1,647,104.
What are your next steps?
Speak to our LCM mortgage advisers if you are buying your first home and looking for a competitive mortgage deal.
Start your free first time buyer quote and we can find mortgages with low rates for your property purchase at this link:
Free mortgage quote with low mortgage rates for your new home.
If you use equity release to access wealth, we can recommend lifetime mortgages so begin your equity release quote for the latest provider offers.