Spring is traditionally a peak season for sales and we’re beginning to see the first ‘green shoots’ of activity. The statistics come from Rightmove, whose March House Price Index reflects data across England, Scotland and Wales. The trend is for asking prices to increase.
As a result, house prices have risen by 0.8% in the last month. This is just below the average monthly price rise charted in March over the past 20 years. The portal suggests sellers are now pricing their homes more realistically, with a new average ‘coming to market’ price of £365,357.
Springing into action
The prospects of sales success have received a boost. Rightmove confirmed more people are getting ready to move, with buyer demand up by 6%, compared with the same period in 2019. Encouragingly, it found first-time buyers were active again, with sales of properties with two or fewer bedrooms improving the most out of all property types.
Small is now perfectly formed
Zoopla’s findings dovetail with Rightmove’s. In March it announced that smaller properties were finding favour with buyers. In fact, the terraced home is now the most in-demand type. In addition, Zoopla found flats were regaining popularity after being cast aside in the pandemic ‘race for countryside space’.
Fixer-uppers are also back in fashion. The portal’s revealed there have been 51% more enquiries for properties that needed revamping or modernisation, compared to recently renovated ones. Listings for houses that mentioned the potential to extend also attracted 7% more enquiries compared to ones that didn’t.
Sentiment is being helped by stabilising mortgage rates. While the Bank of England did lift the interest rate from 4% to 4.25% in March – affecting the entire UK – many lenders have cut rates attached to home loans. Nationwide, NatWest, HSBC and Clydesdale Bank have all reduced fixed-rate products recently. Some five-year fixed-rate mortgages can now be secured for below 4%
We were all ears when the Chancellor delivered his spring Budget in March but it contained little to affect the property market. One indirect benefit for those in England is a result of a change in childcare funding. It relates to 30 hours of free childcare being extended to children of nine months.
The scheme, set for phased introduction from April 2024, is potentially worth thousands of pounds to parents, making them better off financially. The net result? Keeping more income is beneficial when applying for a mortgage, as childcare costs are taken into account when lenders calculate affordability. Scottish and Welsh Governments may choose to expand their own childcare provisions as they will both receive multi-million Barnett funds, although this is a devolved policy.
Energy guarantee also helps affordability
All homeowners in Great Britain will also benefit from the extension of the Energy Price Guarantee (EPG). It was announced that the £2,500 per year cap will stay until July 2023, which should limit how much we spend on fuel. It’s worth noting people will be charged for all the energy they use and this may exceed £2,500.
While the Budget was largely insignificant in property terms, a separate Government announcement in March provided a pivotal change to the English private rental sector. A new edition of the How to Rent guide was published on 23rd March. This revised ‘prescribed information’ document should be issued as part of all new and renewing tenancies with immediate effect.
New landlord responsibilities in England
The new How to Rent guide affects a landlord’s responsibilities concerning fire safety, EICRs and property access for those with a disability. There is no change to the prescribed information in Scotland. In Wales, The Renting Homes (Wales) Act 2016 means landlords need to issue occupation contracts or convert current contracts and provide a copy of the written statement to existing contract holders by 1st June 2023.
There was additional landlord news at the end of the month. While the intention is in its infancy, the Prime Minister announced a crackdown on anti-social behaviour in England and Wales. Concerning badly-behaved tenants, Mr Sunak wants to make the grounds for possession faster and easier to prove where anti-social behaviour is concerned.
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