What’s Happening In The UK Property Market? February 2023

Interest rates have risen yet again, average asking prices have increased by their smallest margin on record for February, and one major online estate agent has put itself on the market.

Read on to find out the latest property market news.

Interest Rates Rise Again

In a move that was widely expected, the Bank of England has raised interest rates from 3.5% to 4% – the highest level since October 2008.

It’s the 10th rise since December 2021, and means an additional £60 per month for homeowners on their repayments for a £200,000 mortgage. 

However, it’s not all bad news for homeowners, with mortgage rates currently falling and economists predicting that interest rates will peak between 4.25% and 4.5% later this year before stabilising, while previous forecasts of a two-year recession have been cut in half. The economy is now predicted to contract by 1%, rather than the previously forecast 2.9%, bringing some much-needed respite to homeowners and buyers.

Average Asking Prices Increase in February…by £14

Data released by property website Rightmove has revealed the smallest increase in February property prices since their records began in 2001.

According to their figures, the average asking price of a UK property rose by just £14 for the month to £362,452. 

While the increase may be minuscule, it’s a positive sign for the housing market following five straight months of falls. 

However, there’s still a way to go before the market can be considered anywhere near normal, as February is traditionally a much stronger month for price growth, as sellers look to get their properties on the market before the busy spring period.

Rents see Record Increase

Figures from the major property website Zoopla have revealed record-high rental increases over the past 12 months, with renters paying an average of £120 more per month than they were at the start of 2022.

Unsurprisingly, the biggest increase was in the capital, where rents have climbed 16.1% over the past year to an average of £1,976 per month – some £270 more per month than 12 months earlier. 

Other major cities, including Manchester, Edinburgh and Cardiff, have all seen double-digit growth in their percentages too, while at the opposite end of the scale, Belfast has seen the smallest rise of the UK’s major cities, with an average increase of 6.7%, or £44 per month.

Purplebricks up for Sale

Struggling online estate agent Purplebricks has put itself up for sale after revealing its expected losses for the year and a drop in revenue expectations. 

The one-time online giant is forecast to make losses of between £15m and £20m this year – a sharp spiral compared to its previous estimate of £10m.

On top of this, the company’s expected revenue has also been cut to between £60m and £65m – a drop of £7.5m on its previous estimate.

The online-only firm was one of the leading lights in the property market after forming in 2012, but its share price has fallen more than 98% from its peak in August 2017. Back then, shares were trading at 514.5p, but the current price is just 7.3p per share.

Mortgage Products on the Increase

The number of mortgage products available has risen to more than 4,000 – the first time mortgage products have gone above that figure since August 2022.

Fixed rates have also continued to decrease slightly, with buyers who can put down more than 40% on a property seeing rates dropping below 5%.

And it’s not just buyers with big deposits who are seeing the benefit. Even those borrowing 95% of their home’s value can secure a fixed rate of around 5.5% if they take out a five-year product as the mortgage market continues to stabilise.

Work From Home Driving Regional Price Growth

Working from home continues to drive up house sales in various parts of the country, with the West Country seeing a significant surge in buyer demand.

One town that’s proving particularly popular is Swindon, where 40% of buyers are coming from outside the area, according to property website Zoopla, with most relocating from London.

It’s not just the capital seeing an exodus of homeworkers. Bristol is another city which has seen mass departures to smaller towns nearby, with one estate agent in North Somerset reporting that 80% of properties in Weston-Super-Mare and the surrounding areas are sold to Bristolians. 

The trend of homeworkers leaving cities and moving to more rural areas was most prevalent during the Covid pandemic, as people looked to find more for their money, but these latest figures are further evidence that the trend has continued long after normality has resumed.

For more local property news and updates and a more detailed overview of the Torbay & Teignbridge area, get in touch with iMove Estate Agents. We are your local property experts. Call us on 01803 367191 / 01626 242349 or email info@imoveestateagents.co.uk.