May 2023 Market Commentary

House prices in the UK have hit a new high this month, with the average price of newly listed properties reaching £372,894. This is a strong market increase of 1.8%. Compared to the 0.2% monthly increase for April, this jump in prices shows promising confidence in the Spring market. This 1.8% monthly increase is the largest we have seen in 2023 so far and well above the 1% monthly increase seen in May last year.

It is usual to see a significant increase in house prices when coming into the Spring market due to higher levels of buyer activity. With the mini budget impacting the market at the start of 2023, this increase we are seeing could be a slightly delayed Spring market reaction.

Looking more locally to the data for the South East, Rightmove stated an average asking price of £494,471 with a monthly change of +2.3%. This is the highest monthly increase in England, excluding the London sector. The year-on-year change for the South East is an increase of 1.3%. Although lower than the UK average year-on-year increase of 1.5%, this 1.3% increase is still a promising increase to be seeing post pandemic. According to Rightmove’s top 10 list of towns by house price increase during the pandemic, towns in Kent, Essex and East Sussex saw some of the largest price increases. It therefore follows that the post pandemic price adjustment we have seen over the last few months has affected these regions a little more than others.

However, since the May House Price Index was released, we have seen some lenders withdraw some fixed-rate mortgage products due to the higher than expected inflation figures from last week raising forcast interest rates.  Looking at the mortgage product availability for residential buyers, Moneyfacts stated a reduction in available products from 5,385 deals to 5,012. While there are still plenty of mortgage products available, the latest updates on interest rates may concern those with a mortgage currently. Inevitably this may create some hesitancy with buyers. However, the strong performance of the housing market in recent months, as the economic climate has presented new challenges, is a reassurance for both buyers and sellers. The potential impact may prove to be house price increases at a more cautious level than we have seen so far this month.

We are seeing that the market is quite price sensitive currently, making the initial marketing price of a property of high importance to the overall sale result. Properties listed with the most accurate price initially are seeing the highest levels of buyer interest and therefore achieving the best results. Getting the initial marketing price wrong and starting off too high, thinking you can always reduce the price down the line, is most likely to negatively impact your overall result quite significantly.

If you’re thinking about putting your property on the market, getting expert advice on the current value of your home is very important in this price sensitive market. Additionally, if you are currently on the market and not seeing the right results in terms of buyer interest on your home, it is better to act sooner to adjust this price so as to not let your property go stale.

If you would like some advice on the current value of your home, even if you aren’t thinking of selling any time soon, we’d be happy to help.