Spring Market Report with The Guild of Professional Estate Agents
Signs of green shoots are appearing in the property market, says Member of The Guild of Property Professionals, Edward Gilbert of Moreland Estate Agents in Golders Green, adding that buyers are returning to the market, supported by falling mortgage rates, wage growth outstripping inflation, and a strong labour market.
Green shoots appearing in the property market
He notes that with the Bank of England holding the interest rate at 5.25%, the consensus is that we are at the top of the rate rise cycle. “Interest rate expectations in the monthly consensus forecasts have been improving over recent months as the economic outlook brightens. Rates are predicted to start falling in the second half of the year, reaching 4.4% by the end of 2024. With inflation under control and forecast to fall to 2.2% by the end of the year, confidence in the housing market is improving,” adds Edward Gilbert
First-time buyers were biding their time during 2023, however, it is expected that more first-time buyers will enter the market throughout the year, encouraged by the dual drivers of earnings growth and reduced mortgage rates improving affordability. According to Moneyfacts, the average two-year and five-year fixed-rate deals have now been falling for six consecutive months. The availability of deals at the 95% loan-to-value tier has increased to 274 deals, its highest level since 2022, demonstrating that lenders are still keen to support borrowers with smaller deposits.
According to Edward the start of 2024 has seen an upswing of new buyers, with agreed sales in the first six weeks of 2024 16% higher than the same period last year and 3% higher than in 2019 according to Rightmove. Average asking prices rose 0.1% year-on-year in February, the first annual increase since August 2023, an indication of growing market momentum. Bank of England revealed that the number of mortgage approvals rose for the fourth consecutive month to 55,227 in January, the highest level since October 2022. The Chancellor announced in the Spring Budget that property gains tax is to be reduced to 24%, which may encourage landlords to sell, boosting transactions.
Edward says that the December UK House Price Index showed a mixed picture around the UK. However, the Nationwide index reported month-on-month house price growth in February, increasing by 0.7% as market momentum grows. “On an annual basis, house prices saw a 1.2% increase in February, the first positive year-on-year growth since January 2023 according to Nationwide. This contributes to the emerging indications of recovery in the housing market. According to the HM Treasury Average of Independent Forecasts, prices are forecast to soften slightly, by -1.0% this year, but recover by 0.8% in 2025,” he adds.
Early signs for the market in 2024 are increasingly positive, with metrics for buyer demand, sales and new instructions all turning positive. Choice for buyers is on the rise, with Zoopla reporting that available homes for sale are 20% higher than a year ago. Improved market conditions are boosting the chances of a sale, although sellers must continue to present their property well and at a reasonable price if they are serious about moving in 2024. Half of agents say offers are currently being accepted up to 5% below initial asking price; however, 15% report this level or higher.
In conclusion, Edward Gilbert says that the average time to sell in the UK has slowed compared to the same time last year. However, with brighter days beckoning, momentum is likely to be injected into the market. Over the last five years, with the exception of the Covid year of 2020, properties have taken 10 days less to sell in spring than winter, meaning this could be an ideal time to put your home on the market.
Read the report here.
The Guild of Property Professionals (The Guild)
The Guild is a network of over 800 of the best independent estate agents from across the UK. The Guild is a sign of professional excellence that agents can use to differentiate themselves from their competitors and assure clients that they will act with knowledge and integrity to achieve results, the three core values of The Guild. To allow agents to perform a superior service, The Guild offers marketing, business and technology services to its members.
