Property Market Update | March 2024
Now that we’re moving into Spring, the UK property market is looking set for a buoyant year to come. Home movers appear to be more active as we enter the new season, which is a cause for cautious optimism, although pricing homes realistically is still going to be essential for some time to come.
Asking Prices On The Rise
According to figures from Rightmove, the first two months of 2024 have seen typical new seller asking prices rise by £3091, equivalent to 0.9%. That means average prices have gone up year-on-year by 0.1% following the annual falls that have been 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 of a return to buyer confidence, it is important to keep in mind that price-sensitivity is still strong amongst prospective purchasers. Moneyfactscompare.co.uk reports that currently, it is taking 16 days longer for sellers to secure a buyer when compared with this time 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. In fact, the figure is up on last year’s numbers by 7%. Not only that, but 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 6 months.
Furthermore, as lenders are adjusting the deals that they are offering on a regular basis, 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. Currently 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 they were at the beginning of the year and there is no shortage of good options on offer. In fact, the number of mortgage deals now available is at the highest level seen since early 2008. At the beginning of this month there were no less than 6004 different products to select from. This is 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 who have 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 latest figures from Zoopla’s Hometrack Report, while there are 20% more properties 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 also remains at its highest point for a decade, and it’s unlikely to improve any time soon without further expansion in the rental supply.
More than 50% of all private rental properties are now costing tenants over £1000 a month, which is close to double the number seen 5 years ago. In 2021, no local market outside Southern England had rents that were more than £1000 per month. Now, the only region where this still holds true is in the Northeast of England.
On the upside for prospective tenants, though, the recent drive to “Build To Rent” is creating new rental markets in city centres. More than 90,000 homes have been built under this initiative nationwide in the past few years, and more are in the pipeline. Hopefully, this may ease some tension in the rental market and help to curtail rental inflation in the near future.
Disappointing Budget Does Not Deter Buyers
Recent studies showed that just over 80% of prospective buyers were holding off on their decision to purchase a property until after the Spring Budget in the hope that some kind of 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 haven’t been deterred from the housing market. 78% of would-be purchasers are still saying that they plan to carry on with 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% are cancelling 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. Metrics for sales, 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 thinking of buying or selling a property, please get in touch with us at Maison Partnership on 0333 242 3292 or email concierge@maisonpartnership.com.
