Only Realistic Sellers succeed in today’s market - leading agent

Only realistic sellers willing to negotiate prices are successful in the current market, says one of the country’s leading estate agents.

The comment came following the surprise announcement that average UK house prices fell by 0.4% in April, taking the annual rate of house price growth to 0.6% in April, from 1.6% a month earlier.

Jeremy Leaf - a former residential faculty chair at the Royal Institution of Chartered Surveyors - says: “We are not surprised by the small drop in property prices. The increase in listings is resulting in more choice for buyers and some heavy negotiations on the ground which means only realistic sellers are proving successful.

“However, underlying demand is much more resilient than it was a few months ago, coinciding with the stronger spring market. There is confidence that affordability will improve now that inflation seems to be more under control and despite recent relatively small increases in mortgage payments."

Agents who have reacted to the house price drop - announced by Nationwide - have unanimously blamed high interest rates for stopping the recovery which emerged early in the year.

Tom Bill, head of UK residential research at Knight Frank, comments: “The house price growth seen in the first two months of this year is going into reverse as higher mortgage rates take their toll on demand. Borrowing costs have risen as a strong labour market means the prospect of a rate cut has become more remote. 

“There are added financial pressures in the system as a wave of owners roll off sub-2% mortgages agreed in early 2022. We believe demand and house price growth will pick up later this year as a rate cut moves onto the horizon.”

Jonathan Hopper, chief executive of Garrington Home Finders, adds: “The New Year jump in prices now seems a very long time ago, after Nationwide's data showed average prices fell in both March and April.

“Two things lie behind the market’s about turn on prices. The first is mortgage interest rates are heading in the wrong direction. The average cost of borrowing is higher now than it was at the start of the year, and this is putting off many would-be buyers. The Nationwide’s research shows 41% of prospective first-time buyers have put their plans on hold because mortgage costs are too high, and this pattern is being repeated across the market.

“The second is the oversupply of homes for sale in many areas. The  flurry of activity seen at the start of the year opened the floodgates for many would-be movers who had been holding off on putting their home on the market. The current surge in supply, coupled with wobbling demand from buyers whose affordability is being stretched to the limit by stubbornly high mortgage interest rates, is pushing prices down in many parts of the country.”

And Amy Reynolds, head of sales at Richmond estate agency Antony Roberts, says: “Creeping mortgage rates are not helping the market and are holding back the lower end. The Bank of Mum and Dad remains essential for the majority of first-time buyers in London and the southeast where property prices are higher."