Rightmove has reported that the average annual rise of 0.2% is the most subdued that it has recorded at this time of year since 2009.
Traditionally the spring market is more buoyant than the typically subdued winter months.
National average asking prices of newly-marketed property rose by 0.7% (+£1,981) in February, consistent with the recent norm for this time of year which saw an average 0.6% February uplift over the previous two years.
As a result, and with average wage growth now running at an annual rate of 3.4%, buyer affordability is improving at the fastest rate against average new seller asking prices since 2011.
Miles Shipside, Rightmove director, said: “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. 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.”
New sellers in all northerly regions, including the Midlands, have sufficient pricing power that they can ask for modest increases compared with a year ago, Rightmove said.
Six of these seven regions are seeing annual asking price growth in excess of 2%, with Yorkshire & the Humber as the highest riser at 3.6%.
Scotland is the poorest performer year-on-year, but new seller asking prices are still 1.6% higher.
In contrast, all southern regions fall below that figure, with three having average prices cheaper than a year ago (London -2.1%, South East -1.4%, and East of England -0.2%).
Shipside said: “Prospective buyers in three of the four southern regions are seeing new seller asking prices cheaper than a year ago, indicating that buyers have the upper hand over sellers when it comes to negotiating a price.
“This has obviously been a factor for some owners in those regions deciding not to come to market. Market conditions are more favourable for sellers further north though agents say that it’s still a very price-sensitive market where asking too much at the outset scares off buyers.
“A first-time buyer in London recently enthused to me that she and several of her friends were now buying properties. She was aided and abetted by a five-year fix of 1.7%, meaning that she could live cheaper on her own than sharing a rented property, since she was fortunate enough to be able to find the money for a deposit. Sellers’ greater willingness to negotiate because of the political uncertainty also helped her cause.”
