Rightmove: ‘Gloomy property predictions looking unlikely’

Sellers and their agents have become more confident about pricing but there are still some signs of “over-optimism” for higher priced homes, RIghtmove claims.

It has prompted the property website to claim that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely. 

The portal’s latest asking price data shows average new listing prices jumped by 1.8% this month – up 1.5% annually - compared with the historical average May rise of 1.0%. 

While there was some caution on asking prices from new sellers at the start of the spring season, Rightmove said, with buyer demand 3% higher than in 2019 and sales agreed just 3% behind 2019’s levels, this positive activity has belatedly filtered through to vendors.

The discount from final asking price to agreed sale price has steadied at an average of 3.1%, Rightmove said, in line with normal market levels, “reflecting home-mover confidence in the outlook for the market.”

However, Rightmove cautioned that while increased seller pricing confidence in the first-time-buyer and second-stepper homes sectors has more justification, there are some signs of over-optimism among typical top-of-the-ladder homes.

Buyer demand is 1% lower than in 2019 for top-of-the-ladder properties, compared with 3% above 2019’s level in the second-stepper sector, and 6% above in the first-time-buyer sector.

Rightmove’s House Price Index showed the value of listings for typical first-time buyer and second-stepper homes were up 0.6% and 0.7% respectively, while homes at the top of ladder saw asking prices rise 2.8% on a monthly basis.

There is of course no guarantee that sellers will get the prices they are asking for.

Tim Bannister Rightmove’s director of property science, said: “This month’s strong jump in new seller asking prices looks like a belated reaction and a sign of increasing confidence from sellers, as we’d usually see such a big monthly increase earlier in the spring season. 

“One reason for this increased confidence may be that the gloomy start-of-the-year predictions for the market are looking increasingly unlikely. 

“What is much more likely is that the market will continue to transition to a more normal activity level this year following the exceptional activity of the pandemic years. 

“Steadying mortgage rates and a generally more positive outlook for the economy are also contributing to more seller confidence, though there are likely to be more twists and turns to come. 

“The market is still very price-sensitive and it is important that new sellers do not damage their prospects of a sale by overpricing initially and reducing later, with agents reporting that it’s the realistically-priced new instructions that are selling best."