HOUSING MARKET UPDATE APRIL 2023

PROPERTY PRICES DROP FURTHER AS FORWARD SIGNS SHOW AN INCREASE OF SUPPLY COMPARED TO DEMAND

Property prices dropped for the seventh consecutive month in March, down by -0.8%, according to Nationwide. Prices are now down -4.6% from their pre-mini-budget peak last August. Only the Southwest saw value growth over Q1, up 0.3%. The next strongest was the East Midlands, down -0.9%. The largest falls were in East Anglia, down -3.1%.

Demand is slowly regaining, with new mortgage approvals rising to 33% below the pre-Covid average in February, up from 41% below in January. New instructions and sales agreed have risen more sharply, according to TwentyCi. Supply of homes on the market surged to 25% above the pre-Covid average in March.

Demand is likely to continue to recover as mortgage interest rates fall, with some buyers currently holding off in the hope of securing a more attractive mortgage deal later on in the year. Borrowers have been keen to remain flexible while rates are still high, leading to a spike in January of variable rate mortgages. These comprised 10% of new lending according to UK Finance, up from just 3% of loans in 2022.

This will be supported by the availability of mortgage products, which has largely recovered to their levels prior to the mini-budget, a sign of increasing confidence from lenders. The exception is for 95% loan-to-value products, which remain scarce.

Despite slowing for the seventh consecutive month, annual rental growth in London was still 14.9% in February. Excess tenant demand still outweighs a shortage of supply to make it the region with the highest rental growth. However, when compared to start of the pandemic in March 2020, its growth of 19.6% still lags behind the UK rate of 20.9% during the same period

Contact our team for more information:

Office: +44 (0) 203 005 5269

Email: info@mestatesltd.co.uk