Now that we’re moving into Spring, the UK property market is set for a buoyant year. Home movers appear to be more active as we enter the new season, which is a cause for cautious optimism, although pricing homes realistically will still be essential for some time to come.
Asking Prices On The Rise
According to figures from Rightmove, the first two months of 2024 saw typical new sellers asking prices to rise by £3091, equivalent to 0.9%. That means average prices have increased year-on-year by 0.1% following the annual falls experienced since summer 2023. This takes the average asking price for a UK property to £363,839.
Yet, while this appears to be a promising indicator or a return to buyer confidence, it is important to remember that price sensitivity is still strong among prospective purchasers.
Moneyfactscompare.co.uk reports that sellers are taking 16 days longer to secure a buyer than in 2023 since buyers are taking extra time to consider all their options carefully.
On the upside, though, plenty of properties were listed on the market over the past few weeks. The figure is up 7% from last year’s figures. Buyer enquiries have also increased by 7%, which suggests a boost in market activity is on the way.
Mortgage Rates Falling
Stability is wavering in the mortgage marketplace, with mortgage products’ typical shelf-life having seen a dramatic fall from a high of 28 days at the beginning of last month—the highest number seen since this time last year—to just 15 days at the beginning of March—the lowest figure seen for six months.
Furthermore, as lenders adjust the deals they offer regularly, the average interest rates for five-year and two-year fixed mortgages rose over the last month for the first time in six months, bringing the run of consecutive drops to an end. The typical 2-year fixed rate has gone up to 5.76% from 5.56%, while the typical 5-year fixed rate has gone up to 5.34% from 5.18%. The Bank of England has also announced that the base rate will hold at 5.25% for a fifth consecutive time.
More Mortgage Products On The Table
The good news for borrowers is that fixed rates are still lower in March than at the beginning of the year, and plenty of good options exist. The number of available mortgage deals has been at its highest since early 2008. At the beginning of this month, there were at least 6004 different products to select from, up from 5787 a month ago and 4372 this time last year.
For borrowers looking for a high LTV deal, there are more products to choose from today than at any other time in the last four years. Those with a deposit of 10% can select from 761 products, while those who can afford a deposit of 5% have a selection of 318 products.
Rental Instructions Up, But Costs Stay High
According to the latest figures from Zoopla’s Hometrack Report, while 20% more properties are available on the rental market nationwide than there were this time last year, the current supply remains below the average number before 2020’s COVID pandemic. Rental affordability remains at its highest point for a decade, and it’s likely to improve soon with further expansion in the rental supply.
More than 50% of all private rental properties now cost tenants over £1000 a month, nearly double the five years ago. In 2021, no local market outside Southern England had monthly rents more than £1000. The only region where this still holds true is in the Northeast of England.
On the upside for prospective tenants, the recent drive to “Build To Rent” creates new rental markets in city centres. More than 90,000 homes have been built nationwide under this initiative in the past few years, and more are in the pipeline. Hopefully, this may ease some tension in the rental market and help curtail rental inflation soon.
Disappointing Budget Does Not Deter Buyers
Recent studies showed that just over 80% of prospective buyers were holding off on purchasing a property until after the Spring Budget, hoping that some pro-buyer announcement would be made. Sadly, despite rumours of the return of the 99% mortgage, no such policy found its way into the chancellor’s speech.
Nevertheless, despite the discouraging news from number 11, buyers have yet to be deterred from the housing market. 78% of would-be purchasers still say they plan to continue their homebuying plans, even if Jeremy Hunt didn’t deliver the goods this time. Only 14% are now choosing to delay their decision, while just 8% cancelled their plans completely following the government’s disappointing news, according to propertyreporter.co.uk.
Looking Forward To Easter And Beyond
As Spring gets underway, the market is looking increasingly positive. Sales metrics, new instructions, and buyer demand are all looking good, and buyers are enjoying a greater range of options since more properties are being listed. As long as serious sellers present their properties to their best advantage and price them realistically, they should be able to secure a purchaser for their home this Spring.
What Next?
We are delighted to bring you our property market updates each month. If you are considering buying or selling a property across the U.K., don’t hesitate to contact us at Properly on 0207 459 4400 or email mariel@properly.space
