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LATEST PROPERTY MARKET UPDATE: DECEMBER 2023

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Mortgage rates continue to fall, the best cities for investment returns have been revealed, and the UK’s 10 happiest places to live have been announced. Plus, we wrap up 2023!

Read on to find out more.

Two-year Mortgage Rates Fall Below 6%

Mortgage rates are continuing to head in the right direction for buyers and homeowners whose deals are due for renewal, with average two-year fixed deals falling below 6%.

The drop in rates follows confirmation from the Bank of England that the base interest rate is being held at 5.25% – the second straight freeze – and competition between the UK’s major lenders has intensified as they battle to keep existing customers and attract the small pool of new homeowners who are coming into the market.

10 Happiest Places to Live Revealed

A survey by property website Rightmove has revealed the UK’s 10 best places to live, as voted for by residents. The company’s Happy at Home Index has been running for 12 years, and for the first time, it’s a London area that’s taken the top spot.

Richmond upon Thames took the crown from last year’s winner, St Ives in Cornwall, which dropped to 9th. Winchester in Hampshire took the runners-up spot, while Monmouth in Wales finished in third.

The survey asked more than 26,000 people to rank things in their area, from community spirit and a sense of belonging to public transport connections and essential local services.

Click here for the complete top 10.

Top 10 Cities for Rental Yields Revealed

If becoming a landlord is on your list of New Year’s resolutions for 2024, you might want to check out the findings of a study by property website Zoopla.

In it, they’ve revealed the top 10 cities and large towns in the UK for buy-to-let returns. The average gross rental yield in the UK is currently 5.49%, but Zoopla’s list of towns and cities smashes that figure and could be a good indicator of where to invest your money in the new year if you’re looking to buy a second property.

Top of the list is Sunderland in the North East, where the average gross rental yield is a very impressive 8.5%. Not far behind is Dundee in Scotland, which also passes the 8% mark at 8.07%, while Burnley in Lancashire takes third place, with a return of 7.96%.

The top 10 are in Scotland and the north of England; they all return more than 7% yearly.

Click here for the full list.

2023 in Review

With 2023 drawing to a close, it’s the perfect time to look back at the year that was. Thanks to the statisticians at Zoopla, we can now share some of the key stats from the past 12 months:

One million homes were sold, and house prices fell 1.2% on average across the UK. The most significant falls were seen in the East of England and the South East, at -2.6% and -2.4% respectively. Scotland and Northern Ireland were the only regions in the UK where prices have risen over the past 12 months.

The most popular types of homes to be sold were terraced houses, with 140,000 changing hands in 2023, followed closely by semi-detached houses. 130,000 of these were sold over the past year. 148 farms and 57 houseboats were sold, too.

The Bank of England raised the base interest rate five times yearly. In 2023, the interest rate was 3.5%, and as we close the year out, it sits at 5.25%.

This led to a considerable knock-on effect on mortgage rates, which peaked at an average of 6.44% for a two-year fixed rate in July and 6.37% for a five-year fixed rate in early August. Both are below 6%, and it’s hoped they’ve seen their peak.

As for standard variable rate mortgages, these went from an average of 6.61% at the start of the year to a whopping 8.74% at the end of 2023.

At the start of the year, selling a house took 36 days on average, and as 2023 draws to a close, it’s only slightly increased to 38 days. It dipped briefly in April to 29 days but has increased with rising inflation and mortgage rates.

And lastly, what about renters? It’s been a challenging year for tenants, with new lets rising by at least 10% for the past 20 months. However, demand hasn’t suffered – it’s remained at 51% above the five-year average for most of 2023.

We are delighted to bring you our monthly property market updates.

If you are considering buying or selling a property, please get in touch with us on 0207 459 4400 or email  [email protected].