THE PROPERTY market remains “very challenging” despite new figures which reveal a rise in house prices.
According to Rightmove, the average price tag on a first-time buyer home hit a record high of £224,963 in April after edging up by 0.2% month-on-month, according to a property website.
Commenting on the figures, Jonathan Rolande, from the National Association of Property Buyers, said: “This is a modest, restrained hike in prices – lower than previous years and of course, compared to many other essentials such as food, a substantially lower rise.
“The time of year is a factor, longer evenings and better weather usually cause a spike in prices.
“More realistic longer-term interest rates are a factor too, as are the increased number of tenants hoping to buy to escape ever-upward rental costs. Estate agents and sellers have factored in this ‘hope-value’.
“It’s important to remember that Rightmove’s figures are asking prices, not selling prices.
“What is hoped for by a seller and what is actually achieved can be quite different – market conditions are still very challenging.”
“Expect to see a similar picture over the rest of the late spring and early summer market.
“Activity will increase and there will be a sense of normality returning after the winter hibernation, but the challenges will remain and will be worsened if we see the base rate rise again.
“Despite this more positive news from Rightmove, it is likely the erosion in selling prices will continue at its current, leisurely pace.
“Rents will stabilise as we reach peak affordability for tenants, but we could well see another round of increases in the autumn as the effects of landlord sell-offs are felt and supply reduces.
“Sellers and agents should be prepared for the frustration of fall throughs becoming more common again as buyers’ expectations increase and refuse to accept defects as they did in the boom.”
Rightmove, which released the findings, defined typical first-time buyer homes as those with a maximum of two bedrooms, including houses and flats.
It said that agreed sales in the first-time buyer sector in March had been running around 4% higher than those seen four years earlier, in March 2019, while sales of homes higher up the housing chain were still lagging behind levels seen four years ago.
Rising rents may be encouraging some first-time buyers to make the jump onto the property ladder, despite higher mortgage rates generally having pushed up borrowing costs.
There have been signs of some lenders cutting mortgage rates though in recent months.