Asking prices for new properties are on the rise, with the average price reaching near-record highs, according to Rightmove.
This increase is being driven by the top-end of the market which is seeing its strongest start to a year for price growth since 2014.
However, despite the positive outlook, high mortgage rates are still a concern for many buyers, particularly those in the more mortgage-dependent sectors of the market.
Experts are advising sellers to price realistically to attract buyers in this price-sensitive market.
‘Top-of-the-ladder sector continues to drive pricing activity’
The firm’s director of property science, Tim Bannister, said: “The top-of-the-ladder sector continues to drive pricing activity at the start of the year, with movers in this sector typically less sensitive to higher mortgage rates, and more equity rich, contributing to their ability to move.
“While some buyers, across all sectors, will feel that their affordability has improved compared to last year due to wage growth and stable house prices, others will be more impacted by cost-of-living challenges and stickier than expected high mortgage rates.”
He added: “Despite these factors, it has been a positive start to the year in comparison to the more muted start to 2023.
“However, agents report that the market remains very price-sensitive, and despite the current optimism, these are not the conditions to support substantial price growth.”
Number of new sellers entering the market is up 12%
Rightmove says that the number of new sellers entering the market is up 12% compared to last year, with sales activity also increasing by 13%.
This growth is particularly pronounced in the top-end which has seen a 20% rise in agreed sales compared to April 2023.
This is down to increased buyer choice in this sector, encouraging homeowners to list their properties.
While overall sales activity is keeping pace with 2019, mortgage rates are significantly higher.
The average five-year mortgage rate is now 4.84%, compared to 2.45% in April 2019.
Offset some of the impact of rising mortgage rates
However, wage growth of 27% over the same period has helped to offset some of the impact of rising mortgage rates.
The platform also says that with the summer holidays and major sporting events on the horizon, property market experts are predicting a slowdown in buyer activity.
This, it says, presents a window of opportunity for those looking to move quickly.
Mr Bannister said: “The summer holidays are typically a time of distraction for some home-hunters, as they temporarily pause their search and head abroad or to the British seaside.
“In addition, the Euro 2024 football tournament and the Olympics this summer, likely followed by a General Election during the second half of the year, will add more buyer distractions than usual.”
He adds: “There appears to be a tempting window of opportunity for those who are considering a move to act now before these distractions arrive.”
