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UK house sales back to pre-pandemic levels as mortgage rates come down

Mortgages Majestic Victorian apartment building near Cadogan Square in the affluent and exclusive neighborhood of Chelsea, London
Mortgages: Demand for flats is driven by professional who wish to shorten their commute

The number of house sales agreed across the UK is back to pre-pandemic levels, with lower mortgages and interest in flats driving the market push.

Overall sales agreed have recovered most in London, with agreed sales 11% higher than March 2019, according to property site Rightmove.

Sales are taking longest to catch up in the East Midlands which is still 11% below 2019 levels.

Sales agreed between sellers and buyers are now just 1% behind March 2019’s levels. The recovery is being driven by flats with agreed sales of flats now 10% above 2019 after being 11% down at the start of the year.

This was most pronounced in London, where agreed sales of flats are 23% higher than March 2019.

Read more: Property hotspots: We reveal the fastest place to sell a house in the UK

“Our offices carry a high proportion of flats and we have noticed a significant upswing in buyer demand for apartments of all sizes,” Robert Sturges, central London area director at Chestertons, said.

“This demand for flats is driven by professional who wish to shorten their commute, parents who invest for their children but also overseas buyers who are taking advantage of favourable currency exchange rates.”

“In the face of rising living costs, some buyers may also decide that a flat is financially more viable than a house at this moment in time.

“Another driving force behind the demand for flats are renters who review their finances amid rising rents and decide that, despite higher mortgage rates, buying presents a better option long-term. We are therefore seeing a number of first-time buyers entering the market.”

Rightmove said that across the UK, agreed sales are still 18% below the “exceptionally busy market” of this time last year.

Average mortgage rates have edged down this year. The average mortgage rate for a five-year fixed, 15% deposit mortgage was 4.63% in March, down from 5.89% in October.

Rightmove’s property expert Tim Bannister said: “The market is remaining surprisingly robust given the economic headwinds that have affected movers over the last six months. While the market is by no means at the exceptional level it has been over the last couple of years, it is a positive sign for agents that sales at a national level are being agreed at the same rate as the last more normal market of 2019, though there are regional differences across Great Britain.”

Read more: UK house prices rise for third straight month to £287,880

“The level and size of reductions has also returned to its pre-pandemic norm, though pricing right the first time can often lead to a quicker sale, so it’s important for sellers to speak to an agent about their local market so that they price realistically and give themselves the best chance of finding a buyer,” he added.

The average size of price reduction from first to last listing price was also back to its pre-pandemic level of 6%, which is the equivalent of £22,000 based on the current national average asking price. It had dropped to 5% during the pandemic.

A third of properties saw a price reduction, which is up from last year’s 19%, but in line with the pre-pandemic level of 34%.

Watch: How much money do I need to buy a house?

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