The start of the year may have been freezing outside with the garden covered in frost but the housing market over the first couple of weeks of the New Year seems to be showing signs of green shoots and welcome activity.
After a stop start year in 2023 during which many buyers put their plans to move on hold, we saw a polarised housing market dominated by 2 types of buyers, downsizers who were able to take advantage of being equity rich cash buyers and first-time buyers frustrated by the cost and availability of rental properties who were able to tap into falling house prices and in many cases the generosity of Bank of Mum and Dad and the many financial products now available to help with funding the necessary deposit.
Whilst cash buyers and first-time buyers account for approximately 50% of residential purchases in an average year, there was a marked decline in buyers who were ‘trading up’ due to rising mortgage rates and surging inflation impacting upon overall affordability. This proved to be particularly marked in more expensive areas such as the South-East.
Fortunately, the feared property crash did not occur, instead the market stagnated with the average UK house price at the end of 2023 only 1.3 per cent or £3,000 lower than 12 months before. Indeed, the market was beginning to show signs of recovery in the last 2 months of 2023 with some analysts reporting a slight increase in house prices in the final month of the year due to stable interest rates, better mortgage deals and improving inflation figures. Nevertheless, as is the case in a buyers’ market, sales remained difficult because there was all too often an impasse between buyers trying to make the most of perceived falling prices and sellers being too ambitious in their pricing and not fully understanding that prices had shifted downwards, and buyers were scarce.
As we move into 2024 the economic situation is generally improving. Inflation is continuing to fall and there is greater certainty about interest rates with the Bank of England holding the base rate at 5.25% for the past 4 months. This is enabling greater competition between lenders with an average 5-year mortgage rate dipping below 5% compared to over 6% just 6 months ago. It is hoped that there will be mortgage rate cuts on the horizon if inflation continues to fall, which will help boost buying power and increase certainty, bringing ‘upsizers’ back into the market. It is now accepted that mortgage rates will remain significantly higher than 2 years ago and that the overall rise in living costs means buyers will remain cautious.
Early indications in January 2024 are that there has been an increase in buyer demand with more applicants registering, greater numbers of property specific enquiries being received and subsequently more viewings. This is being matched in terms of seller activity with many booking in market appraisals and deciding to put their properties on the market earlier than in previous years. Indeed, Rightmove reported a 15% increase in newly marketed properties in their recent monthly House Price Index.
It will however be essential that sellers are realistic with their pricing recognising buyers’ wariness if the market is to recover further. Furthermore, sellers will need to patient, as it is not only taking longer to secure a sale, but buyers are also often dependent upon selling their properties further extending the sale process.
Don’t just take our
word for it...
Simon sold our property before the details even went to print! When the first buyers fell through he wasn’t at all fazed … he sold it again within 2 days! Good communications keeping in touch at all times. I would recommend him and Green Lizard without hesitation.
Green Lizard were recommended to us by family and friends for the sale of our home and we can see why. From the initial valuation through to completion Simon injected refreshing humour and personality into the process whist always remaining professional. This was our first sale and he was very helpful providing us with info on the sale process and what is and isn’t so normal. A pleasure and have recommended to friends already.
Simon and Michael have sold a house for us and have valued our present one. They have always been a pleasure to speak to and have an infectious enthusiasm for all that they do. Refreshingly different in style with results that speak for themselves.
Michael and Simon are two of the rarest kinds of estate agents - honest and trustworthy. I have known so many over the years but the service received from them in Wadhurst has been exemplary - both in terms of sales side and purchase they go above and beyond and are absolutely excellent.
How Much is Your Property Worth?
For many, the first point in their property moving journey, is to understand the value of their current home. We are always ready to arrange a visit and to provide a considered, property specific and individual valuation and to talk through your plans.Book a Valuation