The start of 2024 has brought a dynamic shift in the UK housing market, marking an essential phase for property investors.
According to Rightmove data, property asking prices have seen a notable increase at the beginning of 2024, climbing by 1.3%. This upswing represents the most considerable December-to-January rise since 2020, positioning the average property listing close to £360,000 according to their metric.
Despite this, prices are still 0.7% lower than last year, indicating that UK property marketing is still in flux due to the previous year's interest rate rises and inflation.
As the demand for new homes outdoes supply, house prices are expected to increase yearly.
Activity in the housing market has notably heightened. The number of potential buyers reaching out to estate agents about homes for sale has risen by 5% compared to last year.
New property listings have surged by 15%, reflecting a significant increase in seller confidence and market participation.
However, it's not just about higher listings and asking prices.
The actual number of agreed-upon sales has also increased by 20%, signalling a strengthening UK property market. This trend is reflected in insights from Tim Bannister of Rightmove, who suggests that the property market will be more consistent in 2024 than in the fluctuating patterns in 2023.
Investors must take note of the regional variations in the market. For example, the North West of England and Manchester have seen a significant 1.2% price increase, whereas London has experienced a 0.4% decline. These disparities highlight the significance of local market knowledge when developing investment strategies.
Delays in selling
Despite the positive indicators, challenges persist. The time to secure a buyer has lengthened, with an average of 71 days reported in December.
There has been a significant increase in the average number of days to sell a property, rising from 55 days in July. Estate agents across the UK, such as Chestertons in London and Sharman Quinney in Cambridgeshire, have noticed a rise in market activity. This is mainly due to a decrease in mortgage rates and an increase in buyer confidence.
At the Heaton Group, we remain very optimistic about the long-term prospects for the UK property market. Chris Holland, Sales and Letting director for the Group, explains, "Rightmove's metrics indicate that the average five-year mortgage rate has tumbled to 4.86%, down from a peak of 6.11% last summer. This is great news for homebuyers as the cost of borrowing is now lower."
"This increases mortgage affordability, which, in turn, is likely to increase demand. As demand exceeds supply, property will reach new highs later this year. We could be at the start of a big rally in house prices, as interest rates are forecasted to fully sharply in the next couple of years as inflation comes under control, reducing borrowing cost further".
The current trends in 2024 indicate a positive outlook for the UK housing market. There is an increase in activity and confident pricing. However, there are regional differences, and it may take longer to find buyers. Therefore, property investors need to have a well-informed approach.
Are you ready to navigate these market forces? How will these trends shape your investment strategies in 2024?