The UK Property Market in 2024: A Promising Start with Increased Buyer and Seller Activity

The UK real estate market has kicked off 2024 with a wave of optimism, marked by a notable increase in both buyer and seller activity. This early trend represents a significant shift from the hesitant momentum observed in 2023, suggesting a brighter outlook for the year ahead.

Rightmove have issued their monthly report into the activity they are seeing in the market and it is looking positive at the start of the year when compared to the last few years.

Key Findings:

Rise in Average Asking Prices:
There has been a 1.3% month-on-month increase in average new seller asking prices, now standing at £359,748. This is the largest December to January increase since 2020, although prices are still 0.7% lower than last year.
Elevated Market Activity:
The initial week of 2024 saw a 15% rise in new properties entering the market and a 5% increase in buyer demand compared to the same period last year. This heightened activity indicates a robust interest from both sellers and buyers. For sellers, it's an opportunity to capitalise on the growing demand, while buyers benefit from a wider selection of properties. However, this surge needs to be sustainable to have a long-term positive impact on the market.
Growth in Sales Agreements:
Sales agreed in the first week of the year are up by 20% from last year, indicating renewed buyer confidence. It's an encouraging sign for the property market, signalling a potential increase in successful transactions.
Record Mortgage In Principle Activity:
Post-Christmas, Rightmove recorded nine of its ten busiest days ever for people getting a Mortgage in Principle, signalling strong early intentions for moving plans in 2024. This reflects an eagerness among potential buyers to secure financing, and it's a positive indicator for the market's health.
Stabilising Mortgage Rates:
The average 5-year mortgage rate has fallen to 4.86%, a significant decrease from the 6.11% peak in July 2023. A likely key factor behind the increase in market activity - it makes property purchases more attainable for a broader range of buyers.

Summary

This upswing in market activity is a positive sign for the UK property sector, particularly in light of the challenges faced in 2023. The rise in asking prices reflects a newfound confidence among sellers, who are now entering the market with more realistic pricing strategies. This adjustment is crucial, considering that elevated mortgage rates and the broader cost-of-living concerns are still influencing buyers' spending power.

Tim Bannister, Rightmove’s Director of Property Science, cautions sellers against over-optimism, emphasizing the importance of competitive and realistic pricing. "After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024" says Bannister. He notes that while there is increased buyer activity, sellers must remain grounded in their pricing to successfully navigate the market.

The increased activity is most prominent in London and the North East, where the rise in buyer inquiries is strongest. The growth in properties coming to market, particularly in the North East and South West, offers more choices for buyers, although the overall supply remains tight, only 1% above the more normal market levels of 2019.

Future Outlook

The early indicators point to a more stable year for the mortgage market, with expectations of a Base Rate cut later in the year. However, with a General Election anticipated in the second half of 2024, there could be a temporary slowdown in market activity as buyers and sellers await the outcome.

Bannister concludes, "The data at the start of 2024 points to building momentum, and reasons for growing market optimism." This sentiment is echoed in the market's response, with prospective movers taking proactive steps.

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