(Bloomberg) — Almost half of UK house hunters are set to accelerate their purchase plans this year, with many fearing that prices are about to climb again, according to a survey.
Some 42% of wannabe homebuyers are speeding up their plans compared with 35% in mid-2023, the Bloomberg Intelligence study showed. In London — where homes are the most affordable they’ve been in almost a decade — the share of prospective buyers bringing their purchases forward is even higher at 47%.
“Buyers’ expectation that property values will increase in 2024 could support UK house-price growth,” BI analyst Iwona Hovenko wrote in a report. “The fear of being priced out of the market if they delay has already prompted some to act.”
Read more: London’s Sky-High Home Prices Are Most Affordable in Decade
UK households endured a tough 2023 as high interest rates and a cost-of-living squeeze sapped demand for new homes. That caused property values to decline, though fears of a full-blown crash failed to materialize as optimism grew over interest-rate cuts.
The survey is based on answers from 1,000 adult respondents belonging to the 25-68 age group with a minimum annual gross household income of £45,000 ($57,630). Conducted Feb. 7-10, the survey has a 5% margin of error.
Respondents from London cited the fear of house prices climbing as the primary reason behind accelerating their plans. Even among those postponing or pausing moves, a much smaller proportion is doing so in the hope of a decrease in valuations.
To be sure, while a steady reduction in mortgage costs since the summer eased the pressure on homebuyers, a recent uptick has kept prices at levels higher than Britons have been used to. Poor affordability could contain any house-price growth, according to BI, especially as the cost-of-living crisis plays out.
“Homebuilders and secondary-market sellers may need to tread carefully and avoid overpricing,” BI’s Hovenko wrote. Still, “though confidence remains fragile amid still-elevated rates, these trends suggest housing activity and prices may fare better than last year, supporting homebuilders’ fundamentals,” she added.
©2024 Bloomberg L.P.
