Yahoo Finance Home buyers return to market as mortgage rates fall
Buyers are returning to the housing market amid falling mortgage rates.
Demand from buyers has increased by 55pc this month, compared with the two weeks before Christmas, according to Rightmove.
The property website said this represented the biggest “New Year bounce” since 2016.
The number of buyers enquiring about properties was also 4pc higher than during the same period in 2019.
Experts said falling mortgage rates were contributing to increased confidence among buyers.
The average two-year fixed deal has dropped from a high of 6.65pc in October to 5.63pc, and is down from 5.79pc since the beginning of this month.
Tim Bannister, of Rightmove, said: “Activity has bounced back after Christmas and agents will now be busy trying to match the likely revised expectations of buyers and sellers as we move towards the important spring season.
“We expect that the full effect of affordability constraints and last year’s mortgage rate rises will hold back some segments of the market in the first half of the year, but our leading market indicators may start to identify some green shoots of growth that will go on to strengthen in the second half of 2023.”
He said sellers who are already on the market and have priced appropriately are likely to reap the benefits of increased demand.
Rightmove called the data a “positive sign” but noted that buyer demand was still down by a third compared with the same period last year.
Asking prices were up by 0.9pc this month after falling for the last two months. The average property is being advertised for £362,438, having increased by £3,301.
Although asking prices typically rise in January, this was the biggest uplift since January 2020.
Asking prices remain 2pc – or £8,720 – below the record set in October 2022.
Mr Bannister said: “The seasonal increase in new seller asking prices this January from December is particularly encouraging for movers who are looking for the reassurance of familiar trends and a calmer, more measured market after the rapidly changing and at times chaotic economic climate of the final few months of last year.”
Would-be sellers are testing the waters again, he said, with January 5 now the third-busiest day ever for people asking agents to value their homes.
However, the number of advertised properties remains well below long-term norms.
Gareth Overton, of Henry Adams estate agents, said prospective buyers are being encouraged by more modest prices after nearly two years of surges during the pandemic.
Mr Overton added: “Many of our sellers are opting for more realistic asking prices to reflect the changing market conditions.”
