As March unfolded, the property market showcased a complex interplay of trends and shifts – including mortgage market fluctuations, sales dynamics and house price movements.
According to data released by Twenty7tec, March brought forth developments in mortgage search patterns. Purchase mortgage searches experienced a notable decline of 8.1% compared to the previous month. Similarly, remortgage searches witnessed a downturn of 15.61%. However, amidst these declines, there were nuanced shifts in preferences, with certain fixed mortgage products gaining traction. Two-year fixed mortgages emerged as the frontrunners, commanding a majority share of 51.51% in the fixed product search landscape. Nathan Reilly, director at Twenty7tec, said:
“March 2024 saw a slowing of the market as the combination of an unusually early Easter and the Bank of England’s decision to maintain interest rates saw a nudge downwards in mortgage searches. The figures are, of course, high when viewed in the long-term but will feel slower to a market that has been running hot since Boxing Day 2023.
One new record of note is that more mortgage products are available now than ever before. At month-end, total product availability stood 7.2% higher than the prior month, the first time we have seen over 21,000 products on the market. The previous record was set just a few days before the pandemic affected the UK market in March 2020.
Finally, consumers have built in an expectation of change in rates as the majority of fixed mortgage searches are now for two years or less.”
What’s more, Propertymark’s Housing Insight Report for February provided valuable insights into the supply and demand dynamics within the housing market. The report revealed a noteworthy surge of approximately 18% in new property listings compared to the previous month. The average number of sales agreed per member branch witnessed a commendable uptick of around 19%. However, amidst the flurry of activity, there was a 3% decrease in the number of registered potential buyers. Nathan Emerson, CEO Propertymark said:
“Interest rates remain challenging, GDP has stagnated and broader economic indicators, such as mortgage arrears are trending upwards. However, there is light at the end of the tunnel, with inflation continuing to fall.
In the residential sales sector, demand has temporarily slowed following the January post-Christmas bounce. On the supply side, our members are busy with new instructions, which is increasing stock levels. This imbalance may lead to further price corrections but only in the short-term.
As we progress into March and beyond, the re-establishment of seasonal trends should result in positive progress in both the sales and lettings sectors.”
The Halifax House Price Index for March provided valuable insights into property price movements. While annual growth moderated, with property prices recording a marginal increase of +0.3% compared to the previous year, quarterly figures painted a more robust picture, indicating a notable uptick of +2.0%. However, the average house price witnessed a slight contraction of -1.0% on a monthly basis. Despite these fluctuations, the typical UK home retained its substantial value, commanding an average price of £288,430.
In response to the latest market trends, Nathan Emerson highlighted the resilience of the market in adapting to prevailing conditions, with an 18% surge in new property listings serving as a testament to increased market activity. He expressed hope that if inflation continues to regress to pre-pandemic levels, it may pave the way for a potential reduction in interest rates, fostering stability in the market. Kate Steere, property expert at personal finance comparison site finder.com said:
“The figures show that the events from last year are still weighing heavily on prospective buyers’ minds. While lenders have cut mortgage rates and wage growth has outstripped inflation, the turmoil from the past 12 months is still casting a dark shadow on demand. The Bank of England’s decision to hold rates has dampened UK house price recovery. Half of experts believe that the Bank will wait until June 2024 before cutting rates, so as a result we’re likely to see only a subdued recovery in house prices over the next couple of months.”
