The UK housing market has experienced a significant upturn in the early weeks of 2024, with a reported 13% increase in new sales agreed, indicating a strong market rebound influenced by pent-up demand and dropping mortgage rates now below 5%. Buyer interest has also risen by 12% compared to last year, with sales activity higher across all UK regions.
The surge in sales is particularly notable in Yorkshire and The Humber, with a 19% rise, and the West Midlands, which saw a 17% increase. These figures reflect a greater alignment in pricing between buyers and sellers, a trend that has continued from the previous year. Additionally, the supply of homes for sale has grown by 22%, suggesting increased seller confidence and a boost in options for potential buyers.
Despite these positive signs, the market remains largely in favor of buyers, with a significant number of sellers accepting offers more than 10% below the asking price. This trend underscores the need for realistic pricing and willingness to negotiate to facilitate sales in 2024.
London has emerged as a leader in the rebound of buyer demand, up by 21%, signalling a potential shift in the capital’s property market after several years of subdued activity. Despite improved affordability in London, where house prices now stand at 13 times earnings, down from over 15 times in 2016, the city’s housing remains costly compared to the national average.
Richard Donnell, executive director at Zoopla, said: “It’s a positive start to the year with all key measures of housing activity higher than a year ago. The fall in mortgage rates has led to a rebound in buyer demand and sales following a weaker second half of 2023 when many movers put decisions on hold.
“This improvement in activity will support sales volumes which, at one million, reached an eleven year low in 2023. We don’t see these trends as a precursor to higher prices in 2024 as it remains a buyer’s market. Sellers looking to move should be encouraged by these early signals of activity but buyers remain price sensitive and focused on value for money. Over-optimism by sellers could quickly stall the current improvement in market activity.”
Tom Ashwood, managing director at London agent Tom Ashwood Real Estate, added: “We have most certainly seen a spike in activity across all prices ranges from a buyer enquiry perspective in the early part of 2024 and alongside that there are more sellers looking to list their property, with both exceeding our internal expectations for January.
“I feel the increase in buyer activity that has initially been fuelled by a reduction in mortgage rates and a lack of intent to buy through 2023 will assist in keeping asking prices fairly stable through the initial part of 2024, which will lead to more property being listed for sale. If interest rates remain at a stable level and the appetite remains, we may even see an increase in house price inflation this year, particularly through the good selling time we tend to see between the Spring and Summer months.”
