House price crash fears fade as UK property market climbs for three months in a row | Personal Finance | Finance

At the start of the year, all the experts agreed that the UK property market would crash in 2023.

They only differed on the scale of the sell-off. Lloyds predicted a drop of seven percent, Capital Economics went for 12 percent and Japanese bank Nomura predicted a 20 percent wipe out.

But we’re almost a quarter of the way through the year and two reputable sets of figures suggest the opposite is happening.

Incredible, house prices are climbing.

That’s right. They’re going up.

Today, Rightmove reported that the average price of a home coming to the market climbed by 0.8 percent in March.

That lifted the average asking price by £2,906 to £365,357.

History shows asking prices increase by one percent on average in March, so this is slightly below trend.

Yet it’s still impressive given war in Ukraine, cost-of-living crisis, recession fears and now the global banking panic.

If the UK housing market can get through that little lot unscathed, it will be an incredible feat.

Rightmove’s figures aren’t an outlier, either.

Latest figures from Halifax show house prices jumped 2.2 percent in February, which followed a smaller increase of 0.2 percent in January.

This is even more impressive because it is based on sales completed, whereas Rightmove’s is based on asking prices, which tend to be on the optimistic side.

So what’s going on?

The UK housing market hasn’t become completely detached from today’s troubled economic reality.

Rightmove is reporting “a higher degree of pricing caution” among many new sellers.

Yet it also confirms the “market on a much more stable footing than many anticipated”, with asking prices for larger homes particularly buoyant up 1.2 percent this month.

Halifax figures show house prices fell in October, November and December, before this year’s revival.

But its mortgages director Kim Kinnaird said falling mortgage rates, improving consumer confidence and labour market resilience are helping to stabilise prices.

The big question is whether this can continue.

Mortgage rates have plunged since hitting 6.52 percent after former Chancellor Kwasi Kwarteng’s disastrous mini-Budget in September.

Rates on new deals are closer to four percent, in a boost for two million homeowners will see their fixed-rate mortgages expire this year.

Many will now be able to get an affordable remortgage when their current deal expires, sparing them a forced sale or repossession.

READ MORE: Find out how monthly mortgage repayments are changing with this tool

Mortgage rates may now have further to fall.

As a result of the banking crisis, the Bank of England now looks less likely to press on with further interest rate hikes, to ease pressure on the economy.

Estate agent Jeremy Leaf said Rightmove and Halifax figures confirm what he’s seeing on the ground.

More desirable properties are receiving several offers, particularly family houses which are now in short supple. “Encouragingly, we’ve noticed first-time buyers making a comeback after almost writing them off as an endangered species at the end of last year.”

Leaf added: “We’re looking forward to a busier spring than we dared hope for in the early weeks of 2023.”

With so much gloom around, nothing can be taken for granted.

Yet with mortgage costs falling and property still in short supply, there’s a chance the housing market could escape a crash after all.

I said a month ago that this year may not be as bad as we fear.

There’s a long way to go but it’s good to report one piece of positive news. Fingers crossed for more.