According to the property website Rightmove, the average asking price for a residence in the United Kingdom rose by just £14 from January to February, the smallest monthly increase since the website began keeping records in 2001.
It is stated that the average asking price for a property is currently £362,452.
Typically, asking prices increase at the beginning of the year as vendors prepare for the spring selling season.
Nevertheless, price tags fluctuate, and in certain months of the previous year, such as November and December, they decreased.
According to Rightmove, rising mortgage rates and living expenses were limiting people’s purchasing power. It comes after months of declining home prices and forecasts of further declines this year and next.
Tim Bannister, director of property science at Rightmove, said of the latest figures, “Many vendors are bucking tradition and exhibiting unseasonable initial pricing restraint.”
He added that purchasers were taking longer to “find the appropriate property at the right price” and desired “greater price realism.”
According to the building society Nationwide, UK property prices fell for five consecutive months before January.
The annual increase in home prices slowed to 1.1% from 2.8% in December.
Higher mortgage rates, which have reduced purchasing power, are a factor. After the September mini-budget by Liz Truss, rates peaked at 6.65% and have since declined, but they remain significantly higher than they were a year ago.
Moneyfacts reports that the average two-year and five-year fixed mortgage rates remain above 5%.
Inflation – the rate at which prices increase – is close to a 40-year high, putting pressure on household budgets.
Despite this, Rightmove reported that purchasers had “more options, albeit with revised budgets to accommodate higher mortgage rates.”
The company reported that the number of sales agreements increased, but was still 11% below 2019 levels. They had decreased by 30% in the wake of the mini-budget.
And Tom Bill, director of residential research at estate agency Knight Frank in the United Kingdom, stated that the housing market had improved since the holiday season.
“Buyers and vendors shut down early for the holidays as a result of the mini-volatility, budgets but have returned surprisingly strongly in 2023,” he said.
Knight Frank anticipates a 5% decline in home prices this year as household budgets come under pressure.
The Office for Budget Responsibility, the government’s official forecaster, predicts a 9% decline in prices through autumn 2024, after which prices will begin to rise again.
