The latest Rightmove house price index suggests a tentatively optimistic start to 2024 for the UK property market. Key factors include:
- Seller Confidence: The average new seller asking price increased by 1.3% month-on-month, the largest rise since January 2020. Although prices are still lower than the same time last year (-0.7%), the increase in new properties on the market (15% higher than 2023) points to renewed confidence among sellers.
- Buyer Demand: Buyer demand has also seen a rise, with 5% more prospective buyers contacting agents in the first week of 2024 than the previous year. London and the North East seem to be leading this trend.
- Mortgage Rates & Sales: Mortgage rates have stabilized somewhat, with the average 5-year fixed rate down to 4.86% from a peak of 6.11%. Sales agreed in the first week of 2024 are up 20% compared to last year, reflecting improved buyer confidence.
However, competitive pricing remains crucial, as the number of new properties hitting the market is outpacing the rise in demand. Sellers must stay realistic to ensure successful transactions amidst potential buyer constraints, such as the cost-of-living pressures and elevated mortgage rates.
In summary, while early signs of 2024 market activity are promising, sellers should remain cautious about pricing strategies to keep transactions moving.
The full report can be seen here.
Industry comments
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “There is no doubt the cut in base rate has been a shot in the arm for the housing market, particularly in terms of new enquiries during the traditionally quiet summer period.
“However, the change was anticipated for such a long time so helped soften mortgage pricing on the high street. This meant the impact on property values has been modest to date.
“Of course, Rightmove’s asking prices are not selling prices but do reflect an important trend in seller aspiration and confidence.
“With so many buyers, sellers and others involved in the transaction process now on holiday, obtaining commitment to proceed has been tricky although we certainly expect momentum will return from early September.”
Tomer Aboody, director of specialist lender MT Finance, says: “Now that we’ve had the first interest rate cut in a few years, mortgages have followed suit, which has already led to more activity in the market. There has been an uptick in the number of buyers and sellers registering interest, keen to take advantage of lower mortgage rates. This, along with lower inflation numbers, has provided a positive outlook and feel-good factor for the market, bolstered by the hope of further rate reductions to come.
“However, there is a potential fly in the ointment with the new Chancellor’s October Budget on the horizon and a fear that higher taxes could result in that feel-good factor slipping away. Here’s hoping that isn’t the case and that there is some more positivity in the market for the final four months of the year.”
Chris Rowson, Managing Director at Sharman Quinney in Cambridgeshire It’s certainly cold out there at this time of year, but the housing market is just heating up. We’ve had a really promising start to the year, with some very positive signs. Future sellers are getting their valuation appointments booked in, future buyers are enquiring and getting their viewings booked in and we’re also seeing really high demand for mortgage appointments, as movers seek to understand their affordability and position at the start of the year. Most importantly, we’re seeing offers being made, and a high number at that. It is early days and not a time to get carried away, but we’ve had a good start.”
Paul Bayliss, Director at The Square Room Estate Agents on The Fylde Coast “It’s been a busy January so far, which has actually followed a busy end to 2023 for us, even more so than over the summer which is unusual. The key thing is mortgage rates, and with rates coming down from July and into the start of 2024, we can see buyers have got more confidence. We’ve seen a lot of activity from first-time buyers, now ready to make their move at the start of the year, and with mortgage rates more settled, we’re also starting to see upsizers return who are now more confident to take out a larger mortgage for a bigger home. The market is just getting started, but we’re optimistic about what 2024 can bring.”
