The average house price rose by almost £3,000 in March, despite widespread predictions that the housing market would contract this year. Yahoo Finance reports that the latest figures released by Rightmove show that the price of new listings increased by £2,906 compared to February this year.
The average asking is still below the peak of October 2022, when the market was at the height of the turbulence created by the pandemic and the stamp duty holiday. However in the face of higher mortgage interest rates and weak economic growth, the housing market defied predictions that prices would fall sharply this year.
Rightmove’s Tim Bannister said: “The beginning of the spring season sees stability and confidence continuing to return to the market as it recovers from the turbulence at the end of 2022.”
He added: “The pace of the market reached an unsustainable level in the last two years, and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-budget.”
“While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season.”
The continued shortage of new homes and the slowing of inflation rates is expected to create relatively stable conditions in the housing market for the foreseeable future. However, the cost of living crisis and the higher mortgage rates may still mean that some mortgage holders and first time home buyers will need to consider their options carefully.
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