Higher mortgage rates didn’t dampen buyer motivation in the capital in April, as house hunters remained driven to finalise their property purchases last month. Compared to March, our offices registered a 5% uplift in the number of contracts being finalised whilst the number of buyers withdrawing their offer decreased by 5%.
Recent data from property portal Rightmove supports this, revealing that property sales in London increased by 4.4% in April vs March although the average two-year fixed rate rose to 5.8% and the average five-year fixed rate rose to 5.39% in April. At the time, rates were rising as it was not expected that the Bank of England was going to cut borrowing costs due to stubborn inflation.
Matt Thompson, Chestertons’ head of sales, says: “The majority of buyers in April would have secured a fixed mortgage ahead of rate hikes which means they would have been largely unaffected by rising mortgage rates. Other house hunters decided to rethink their budget or widen their search radius to accommodate the rate increases rather than giving up on their search completely – particularly as the spring market has seen an increase in the number of available properties which has given buyers a larger pool of homes to choose from.”
We registered an 18% uplift in the number of sellers instructing for their property to be put on the market in April vs March. Meanwhile, our offices conducted 11% more viewings with interested buyers.
“We expect this level of demand to be maintained over the coming months – especially as some lenders have now begun cutting their rates amid predictions that the Bank of England will lower interest rates later this year. London’s property market will remain competitive, however as supply levels increase, some sellers may be more willing to reduce their asking price to secure a sale”, Thompson adds.
Rightmove’s latest data indicates that the average asking price in London fell by 1% from March and now stands at £684,410 which confirms that properties in the capital have seen a marginal drop in value.