March 2023: Rightmove expects a more balanced market

Tue 07 Mar 2023

The latest Nationwide House Price Index reports that in December annual price growth in the UK housing market slowed for the fourth consecutive month. The rate fell to 2.8%, down from 4.4 % in November. The slowdown was seen across all regions during the final three months of 2022. The average price of a UK home fell in December by around £1700 to £263,788.

Rightmove, however, report a modest 0.9% rise in asking prices in their January index. They comment that this is the largest January increase since 2020 but that the average asking price of £363,432 remains over £8000 lower than in October. According to their figures, the annual rate of growth in asking prices stands at 6.3%, which they see as an "encouraging start to the year".

Tim Bannister, Rightmove’s Director of Property Science, believes that the 4% increase in buyer demand seen this January compared to pre-pandemic January 2019, is a positive start to the year. Moreover, the number of people requesting an estate agent valuation in the first week in January was the third-highest number ever recorded by Rightmove for the time of year. Rightmove also sees the softening of mortgage rates as a further reason for optimism, especially for the first-time buyer market. However, they believe that cost of living pressures, together with the increase in mortgage rates seen last autumn, will continue to negatively affect some market sectors for the first six months of 2023.

“In the third quarter of 2022, the price band which saw to most sales in Harrow was £500-750k which accounted for 46.6 per cent of all sales.”

The Harrow property market is divided into segments, based on price thresholds. This is important, because supply and demand vary quite considerable between these segments. In the third quarter of 2022, the price band which saw to most sales in Harrow was £500-750k which accounted for 46.6 per cent of all sales. Overall, 76.7 per cent of all sales were above the £400k threshold.

Looking ahead, neither Nationwide nor Rightmove are predicting any crash in the housing market in the year ahead. Nationwide is forecasting a "modest" 5% decline in prices in 2023, unless there are unpredicted rises in mortgage rates or unemployment. Rightmove believes that the market will return to a more balanced state as supply and demand become better balanced than in recent years.