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House prices fell 3.1% on an annual basis in March, the biggest fall by this measure since July 2009. This follows a 0.5% drop in January, 1.1% drop in February and 0.8% in March. 9 out of the 13 regions saw house prices falls, with 4 regions seeing a slow- down in growth reflecting huge location variances. Scotland was worst performer, the West Midlands saw prices rise 1.4%, making it the best performing area. Although the market remains subdued there are signs that buyers are returning with much increased availability.

Unlike the financial crisis of 2008, we haven’t seen an aggressive drop-off in transactions, slowdown in prices is not the crash markets expected.

Buyers are negotiating hard on asking price skewing data on many major portals recording on market price as sold prices which averages 95.5%.

Confidence is returning to the property market following the fallout of the mini-Budget last September and we should expect further improvements, so long as inflation is brought under control this year.

As we get further into the year, we’re expecting inflation to fall significantly, so we may well see rates on the way down again.

March saw a pickup in the number of mortgages approved however, it’s still less than half the numbers we were seeing two years earlier.

There is a close correlation between house price index trending 2-3 months behind consumer confidence index. There are some very interesting early signs in Q1 with an uptick in consumer confidence driven largely by a general acceptance that the UK’s financial future is in good shape.

UK Consumer Sentiment Improves to 1-Year High

The GfK Consumer Confidence indicator in the United Kingdom rose to -36 in March 2023 from - 38 in February, matching market expectations and pointing to the highest reading in a year amid better economic forecasts. However, March’s figure remained well below zero, indicating an overall decline in confidence as weak sentiment over personal finances continued to weigh heavily.

Overall improvement is marred by continuing consumer concern about personal financial stability.

Wages are not keeping up with rising prices and cost of living driven by soaring energy and food prices, as well as higher interest rates are squeezing household budgets.