Buyer affordability improves whilst asking prices continue to grow in latest HPI
Buyer affordability in the property market has improved once more as wages grow above house prices according to Rightmove's latest House Price Index.
Average wage growth is now running at an annual rate of 3.4%, compared to the latest house price growth of 0.7% over the last month, adding an average £1,981 to the value of newly listed properties – slightly ahead of the usual February pick-up the market had experienced in the previous two years.
The news is positive for both buyers and sellers, with buyer activity remaining strong against an uncertain political backdrop and sellers continuing to see potential returns increase.
Rightmove director and housing market analyst, Miles Shipside, commented on the latest figures that: “Longer daylight hours and green shoots appearing in gardens herald the start of the traditionally more buoyant spring market.
“Sellers’ subdued pricing is now being outstripped by higher average wage growth, meaning that buyer affordability is on the rise at the fastest rate in nearly eight years.
“Buyers are also being given the leg-up by cheap mortgage rates if they can meet lenders’ criteria and lay their hands on a large enough deposit.”
Ongoing political uncertainty could influence things, however, despite the current HPI figures and additional data from e-surv showing the number of mortgage approvals boosted 4% in January compared to December with strong demand from first-time buyers.
“In theory, the scene would be set for an active spring if it were not for the uncertain political backdrop.
“As it is, the extent of that activity will depend on the degree of hesitancy among sellers to try to sell and be realistic on price, and buyers overcoming short-term uncertainty and taking a medium-term view that this is a good time to buy.
“As always those decisions will also be influenced by local market dynamics.”