According to Rightmove’s House Price Index, the monthly increase in asking prices is above the typical one per cent uptick in the period, which is the average for the last 22 years.
The report noted that the monthly increase is the biggest monthly rise for 10 months and shows that the market “continues its recovery after a muted 2023”.
The annual increase came to 0.8 per cent, which is up from 0.1 per cent in February.
The firm noted that average asking prices were £4,776 below the peak in May 2023, which had led some to see more of a “window of opportunity to buy”.
It added that the number of sales being agreed was 13 per cent up on this time last year.
Buyer demand is also eight per cent above last year’s figures, which it attributed to the “less-mortgage-rate-sensitive larger homes sector and London”, with agreed sales 18 per cent higher than last year.
Digging into specific sectors, the national average asking price for first-time buyers, excluding inner London, came to £226,370, which is a monthly increase of 0.7 per cent and an annual increase of 0.9 per cent.
Second-steppers’ national average asking prices stood at £339,341 in March, which is one per cent up month-on-month and 0.7 per cent up year-on-year (YOY).
At the top of the ladder, the national average asking price was £664,422, which is 2.9 per cent compared to the prior month and 0.9 per cent up on the same period last year.
March strong month for asking prices but Budget a downer
However, the report said that the growth in buyer demand had been dampened by a lack of housing support, especially for first-time buyers, in the Spring Budget.
Rightmove continued on to say that the average time to find a buyer stood at 71 days, which is the longest at this time of year since 2019.
“Attractively priced properties are quickly being cherry-picked, but over-optimistically priced sellers are taking longer to find a buyer,” Rightmove said.
The average five-year fixed rate is priced at 4.84 per cent, which is up from 4.64 per cent five weeks ago.
Tim Bannister, Rightmove’s director of property science, said: “March is typically a strong month for asking price growth, as both buyer and seller activity levels rise and the spring selling season gets underway.
“However, the stronger-than-usual price growth this March indicates that new sellers are feeling much more confident, with some perhaps being over-optimistic, that there is enough buyer activity and affordability in their local market to achieve a higher price.”
He noted that, while there had been above-average price increases in the first three months of the year, asking prices were almost £5,000 below the high in May 2023.
“For those who can afford to buy and have yet to take action to move this year, this may provide a window of opportunity to buy, as we now seem to be past the bottom of the market.
“While some sellers are still being over-optimistic with their pricing expectations, there are also more sellers who are aware of the need to be negotiable and realistic, with elevated interest rates compared to recent years still stretching affordability for many buyers,” he noted.
Bannister continued on to say that, while the start to the year had been “better than many anticipated”, the picture can quickly change, with negative economic news or surprises.
“Sellers are right to feel more confident and optimistic this year, but buyer affordability remains stretched and higher mortgage rates are an ongoing challenge.
“With the market still sensitive to pricing and external events, some caution and willingness to negotiate is advised for sellers who are keen to find a buyer in the spring market,” he said.
‘Most listings mean buyers are often spoilt for choice’
Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors (RICS) residential chairperson, said that while the figures show asking prices rather than selling prices of new listings, the report showed interesting trends.
“More listings mean buyers are often spoilt for choice, so are not rushing to take the plunge. Some were holding back from making offers in expectation of Budget giveaways or further mortgage rate cuts, which have not really materialised.
“On the other hand, as the market remains price-sensitive, with only realistically priced property attracting attention, those sellers who appreciate that, if they receive enquiries in the early days of marketing, they are much more likely to find a buyer, are taking most advantage of increased demand,” he explained.
James Briggs, head of intermediary sales at mortgage lender Together, said that as affordability concerns were “seeming to ease”, buyers could “snap up bargains as momentum in the market picks up”.
He continued: “The ambition for homeownership is far from dwindling, with many younger buyers planning to step onto the housing ladder. From our own research, we know a fifth (20 per cent) of first-time millennial buyers opted to move back in with their parents to expedite saving for a deposit.
“An additional boost came with the Chancellor announcing in the recent Budget that the higher rate of capital gains tax (CGT) on residential property sales will be cut by four per cent, triggering sales from rental investors, and we could see a new wave from those who have put off the option of exiting the rental market, opening up more family homes and spaces for first-time buyers.”
Briggs said that, whether it was first-time buyers or movers, schemes like shared ownership and Right to Buy shouldn’t be overlooked.
