MHHG estate agents

The UK property market has witnessed a robust start to 2024, marked by a rebound in sales activity. The market conditions have improved, driven by sub-5% mortgage rates, which have supported housing demand and sales agreements. Here's a comprehensive overview of the key trends in the UK property market for the first quarter of 2024:

1. Strong Rebound in Housing Demand:

Buyer demand has surged by 12% compared to the previous year, indicating a positive start to 2024.

Despite this increase, demand remains 13% below the five-year average, which includes the peak years of 2021-2022.

This rebound is a response to pent-up demand following a weaker second half of 2023, marked by delayed decisions due to rising mortgage rates.

2. Sales Activity Surge:

All measures of sales activity have shown a year-on-year increase, with a notable rise in sales agreed.

New sales agreed are up by 13% compared to the same period last year, and this trend is consistent across all countries and regions.

Yorkshire and the Humber (+19%) and the West Midlands (+17%) have experienced the highest increase in sales, reflecting improved alignment between buyers and sellers on pricing.

3. Increased Supply and Buyer's Choice:

The number of homes listed for sale has increased, boosting overall supply by 22% compared to the previous year.

On average, each estate agent has 28 homes for sale, providing buyers with a broader choice and helping to maintain stable pricing.

4. Price Adjustments and Market Conditions:

The market conditions are supporting pricing levels, with the UK house price index recording a slowdown in annual price falls (-0.8% in December 2023).

Modest price falls are occurring, with the East of England (-2.5%) and the South West (-2.2%) experiencing the largest declines. Northern Ireland, however, saw house prices rise by 3.2% in 2023.

5. Affordability Challenges:

Housing affordability in the UK, measured on a house price to earnings ratio basis, is at its lowest since 2014.

While slowly improving, housing affordability remains a concern, with prices still high compared to earnings.

6. Caution Amid Positive Trends:

The rebound in activity in early 2024 is positive, but caution is advised regarding the outlook for the rest of the year.

Lower mortgage rates are expected to support sales volumes but may not have a significant impact on prices.

Sellers should remain realistic in pricing, given the existing buyer's market conditions.

7. Pricing Realism for Sellers:

Sellers must price their properties realistically, as some are still adjusting asking prices to attract buyer interest.

Over 20% of sellers are accepting more than a 10% reduction from the asking price to secure a sale.

In conclusion, while the UK property market shows signs of recovery in 2024, sellers should remain pragmatic in their pricing expectations, and buyers can enjoy increased options and improved affordability.