Strong buyer interest persists despite mortgage rate increases
22nd June 2023
Rightmove’s latest data reveals that the level of interest from buyers in properties for sale remains strong, surpassing the figures from the same period in 2019 before the pandemic. Despite recent increases in mortgage rates, which have risen notably over the past few weeks, the impact on the number of sales agreed has been minimal, according to Rightmove. The real estate portal also notes that it remains to be seen how the expected further rise in interest rates will impact buyer demand in the upcoming weeks.
Rightmove highlights that the upward trend in mortgage rates has led to an increase in prospective buyers assessing their current affordability. Daily visits to Rightmove’s Mortgage in Principle service have surged by 53% compared to the period prior to the release of unexpectedly high inflation figures. Tim Bannister, Rightmove’s Director of Property Science, acknowledges the various twists and turns in the market, including persistently high inflation, significant average wage increases, and their subsequent impact on mortgage interest rates and availability. He also expects further changes to occur based on this week’s inflation figures and the Bank of England Base Rate decision. He anticipates a frantic atmosphere among those seeking mortgages, as they strive to secure the best available rates swiftly. While the impact of higher mortgage rates on activity levels has been limited thus far, prospective buyers who can still afford to make a move remain determined to proceed. However, it remains uncertain how movers will respond to the projected future rate increases.
In terms of asking prices, Rightmove reports a minor £82 decrease this month, with the average now at £372,812. Although this marks the first monthly drop in new asking prices in 2023 and the first during this time of year since 2017, the decrease is minimal at 0.0%.Rightmove suggests that buyer affordability constraints and sellers adopting a more realistic pricing approach have contributed to this smaller-than-usual summer slowdown. The real estate portal expects asking prices to gradually decline in the second half of the year, following the typical seasonal pattern. The current market trends align with Rightmove’s original forecast of a 2% annual drop in asking prices by the end of 2023.
As the market continues to evolve, the impact of mortgage rate increases and sellers’ pricing strategies will shape buyer demand and overall market dynamics in the months to come. Are you thinking of selling your property? Here at Coapt, we have a vast network of landlords and buyers who are looking for properties that we can quickly reach out to. Speak to our Senior Sales Consultant, Adam Coffin, today and take the first step in selling your property.
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