The start of 2023 has proved more stable economically than many anticipated, Nicky Stevenson, MD of Fine & Country, has observed.

According to Stevenson, although the Bank of England reports that approvals in January fell to their lowest level since May 2020, it is clear the housing market continues to transact.

“According to the Dataloft Opinion Poll, seven in 10 agents are sensing there are more cash purchasers in the market,” she said. “HMRC have reported that sales volumes in January are on par with the pre-pandemic January average, and Zoopla report that while buyer demand is 51% lower than the same time a year ago, it is still 8% ahead of the pre-pandemic average of the years 2017 to 2019.

“For those requiring a mortgage, the market continues to stabilise, with product choices increasing. Moneyfacts report that there are more than 4,300 different deals now available, the first time since August 2022 that product choice has surpassed 4,000, presenting plenty of opportunities for buyers,” she adds.

After two years of limited new supply to the market, there are signs of more balance as supply returns to normal levels, according to Stevenson.

“Zoopla report a 60% increase in stock year on year, creating choice and giving prospective home buyers options and more room to negotiate on price,” she said. “Rightmove revealed that average new seller asking prices rose by just £14 between January and February, the smallest ever increase between the months, indicating that sellers may be being realistic on pricing and listening to their agent’s advice.

“There may be a pause in demand if anticipated falls in mortgage rates encourage buyers to hold off and hedge their bets. Indeed, Nationwide reported the first annual fall in sales prices for the first time in nearly three years, falling 1.1% in February 2023.”

Looking specifically at the prime market, Stevenson said that annual price growth is currently outpacing the wider market, where month-on-month prices are showing signs of moderating.

“In England and Wales the average price of a prime market property has risen 9.8% year-on-year,” she observed. “London has seen the strongest growth at 11.4%, closely followed by the South West at 11.2%, and the East of England at 10.2%.

“Wealthier buyers are largely shielded from the higher mortgage rates which have impacted the wider market and the value of the pound remains attractive for international buyers. New instructions for homes priced at £5m were 74% higher in the last quarter of 2022 compared with their pre-pandemic average,” Stevenson concluded