The average price of a home eased to 1.7% growth to £366,247 in the year to April, but first-time buyers face record prices “despite economic headwinds”, data from Rightmove shows.
The cost of a property lifted by just 0.2%, or £890 this month, “lower than the average of 1.2% at this time of year, as new sellers heed their agents’ advice to price cautiously and tempt spring buyers,” says the house sales website’s April House Price Index. This compares to 3% growth in the year to March.
But prices for FTBs rose 2% over the year to £224,963, or 0.2% in April, even with inflation and the base rate near 40-year highs at 10.1% and 4.25%, respectively. FTB sales account for roughly 30% of all homebuyers.
However, the report says agreed sales are recovering, and are coming into line with the more normal pre-pandemic market of March 2019. They have also topped last September’s level, after which home sales plunged by 21% following the tax-cutting mini-Budget, which saw mortgage rates rise sharply to over 6%.
The survey adds that FTB homes (two bedrooms and fewer) leads this recovery, with agreed sales now 4% higher than in March 2019, with the second-stepper sector remaining 4% behind, while the top-of-the-ladder sector is 3% behind this benchmark.
But the index points out that agreed sales are still 18% behind last year’s exceptional market — driven by the post-pandemic ‘race for space and lower mortgage rates for much of the year — as the property market “transitions to a more normal level of sales activity”.
Rightmove director of property science Tim Bannister says: “The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace.
“Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.
“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.”
He adds: “FTB properties have reached a new record price of £224,963 this month, which may appear surprising given the economic headwinds that have made taking out a mortgage more expensive and saving up for a deposit even more challenging.
“However, solid buyer demand in this sector which is now 11% higher than in the same period in 2019, illustrates the continued strong desire from would-be first-time buyers to own their own home.
“This is even more understandable given the fiercely competitive rental market, with soaring rents reaching new records and making buying compelling for those who can raise the deposit and obtain a mortgage.”
