Anyone reading the papers earlier this spring might have been forgiven for thinking the UK property market was not in the best of shapes. After all, some mortgage rates had been rising, mainly due to predictions that the Bank of England would make fewer interest rate cuts in 2024 than previously anticipated. And the market may have seemed sluggish generally.
Yet, ultimately, there are more reasons for sellers to have confidence than may have been apparent.
One leading national estate agent has forecast, for example, that, by 2028, house prices will lift by more than a fifth. This is based on expectations of a stronger UK economic performance and future rate cuts. It has led the property company to reverse its forecast of a drop in UK high prices this year. Instead, it now expects average prices to increase by 2.5% during 2024.
And in May the Bank of England offered its clearest hint yet that interest rate cuts could be coming our way this summer.
There was further good news for homeowners looking to sell this month as one major online property portal said that the price of homes being put on the market scaled a record high of £375,131. The portal added that this was the fifth consecutive rise of asking prices, and represents a lift of 0.8% compared with April.
The portal now expects the number of house sales in 2024 to reach around the 1.1m mark, but highlighted the length of time it can take to complete a sale once a buyer has been found, and stressed that this was likely to remain a challenge both for those moving home and estate agents.
The current buoyancy could well be down to pent-up demand for those looking to buy last year who may have put their plans on ice last year.
Meanwhile the Office of National Statistics has just announced that average UK house prices rose by 1.8% in the year to March 2024, the first yearly lift since nearly a year ago in June 2023.
Equally, sales agreed have increased nearly a fifth (17%) during the first four full months of 2024 compared with 2023, despite the lack of a cut in rates.
Earlier this spring, one of Britain’s biggest lenders, Halifax, reporting a 0.1% rise in house prices in April, when a typical home was valued at £288,949. (This according to the lender’s monthly House Price Index.) That lift followed a 0.9% fall in March, with, on an annual assessment, a price rise of 1.1%. London was still the UK’s costliest region in which to purchase a property, with average prices standing at £539,336.
The organisation’s head of mortgages Amanda Bryden told journalists the market was ‘finding its feet’ during a time of increased mortgage rates, while demand and activity were both on the rise.
“Homebuyers are gaining confidence from a period of relative stability,” she added, despite borrowing costing more than it did a few years ago.
One London estate agent agreed, telling a national paper: “Underlying confidence remains strong, giving purchasers the opportunity to perhaps negotiate a little harder where possible.”
And one trend Halifax has noticed is for first-time purchasers to opt for smaller properties, such as flats, due to higher mortgage rates. Indeed, it’s flat prices which have risen most sharply. (Equally, at the top end of the market, larger properties also saw disproportionate rises.)
The last time the Bank of England announced a decision on rates, they remained unchanged at 5.25%. While market analysts had expected a rate cut in May, that may now not happen until August. But UK inflation is on the way down, having fallen from 3.2% to an annual rate of 2.3%, as announced on May 22, driven mainly by falling energy bills.
Some major lenders, including HSBC UK, Barclays and TSB, have lowered their rates this month, in an encouraging sign for the mortgage market generally.
Oakfield says
It’s true that there is still potential for some volatility and uncertainty, and the property market certainly is not without its challenges right now. But the sales teams here at Oakfield Estate Agents have been very busy this year so far and have seen a lot of activity in terms of selling and buying. So we see plenty of grounds for confidence and optimism as we move into the summer months. After all, early summer is typically a brisk time of year in the property market – and 2024 so far is proving to be no exception. So we believe selling season is already gathering momentum.
Remember, we’re your local estate agents operating across East Sussex, with branches in Lewes, Uckfield, Heathfield, Eastbourne, Bexhill and Hastings. (We’ve served and had a presence in the local market since 1996, so know and understand it well.) We’re here whether you’re ready to sell your home or are looking to buy a new place.
Above all, we really listen to our buyers and sellers, and fully appreciate that clear, regular and open communication is key to any successful property transaction. It’s important to us to build strong, lasting working relationships.