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The Housing Market Sees New Year Bounce Ahead of Spring

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In our latest review of data from estate and letting agents on the front line of the housing market, I’m delighted to say there’s a feeling of spring about it all.

This data from Propertymark, the professional agents’ trade body in the UK, is based on the first weeks of 2024 so the market isn’t yet at full speed. However, green shoots are starting to show.

Housing market overview

Let’s start with the stats.

There’s been a 129 per cent increase in the number of appraisals by agents (these are the very first stage of possible instructions to sell) and an 80 per cent rise in the number of properties actually coming to the housing market and being listed online. On top of that, there’s been a 120 per cent rise in the number of prospective buyers registering at estate agent offices.

Those are big figures and it’s worth remembering that they come after the Christmas and New Year lull. So the percentages are bound to be large.

Yet this is distinctly promising, and it shows that while we’re still a few months away from the Bank of England reducing its core base rate, buyers are coming to terms with more expensive mortgages and deciding to “get on with life” by entering the housing market again.

There’s also a promising under-the-radar measure too.

The property sales market

The average number of market appraisals conducted per Propertymark agency has increased to 24 from a low of just 10 towards the end of last year. It takes a few weeks for appraisals to turn into homes for sale. But this nonetheless means there’s likely to be a healthy pipeline of properties ready for buyers as spring and summer approach.

And so, to prices, where most agents are reporting small and sustainable increases.

These are modest and don’t significantly change the overall values of properties in the long term. But they are another indicator of activity in the housing market early in the year. Propertymark says other indices show the same trend. More buyers and sellers than this time last year. And small price rises to offset the minor falls seen in 2023.

But this promising new year bounce hasn’t resolved two problems.

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Market affordability

Firstly, affordability remains acute, and buyers are carefully assessing budgets in light of high-interest rates. For sellers this means being highly realistic with asking prices. Your local Propertymark agents will advise you as part of a marketing strategy.

Housing market delays

Secondly, there remain time-consuming blockages in the buying system around council searches and the workload of conveyancing solicitors. One day there will be a faster digital-based way of selling homes. With more upfront information (I promise). But for now, Propertymark warns that some transactions are taking 17 weeks to exchange contracts!

It’s crazy, but it emphasises the need for sellers and buyers to have as much information in place. To minimise the risk of a property sale to fall through. All it takes is just for one party to get cold feet during the long transaction time.

Rental market data

I wish there could be something new to say here but regular readers will know the score:

demand still outstrips the supply of homes to rent.

In the early weeks of 2024, there have been an average of eight new tenant applicants registered at each Propertymark agent. Actually, that’s lower than a year ago but is still well ahead of the availability of homes to rent.

The stock shortage is partly because some landlords have sold. To avoid higher costs likely when new regulations come in late this year. It’s partly also because fewer tenants are changing properties. To avoid the risk of being hit with higher rents than they pay now. So at any one time, there are fewer flats and houses listed as available to let.

This shortfall means only one thing – more rent rises. But these are likely to be significantly lower levels than those seen in 2023.

The housing market in the next few months

A lot is happening soon which could affect the housing market.

The Budget is imminent and as usual, there’s speculation about tax changes especially as a General Election is close. And history shows that when an election is called the housing market tends to go quiet as people wait to see the result.

Finally, on the rental side, there will be changes thanks to the Renters Reform Bill. This is set to become law at long last later this year. After lengthy and bad-tempered debates in Parliament – and it will probably force more costs on landlords. Will more quit as a result?

Stay updated

As ever, a lot is going on (and I mean a lot!). But we’ll be back in a month to bring the latest property market data from the front line of the housing market. If you haven’t done so already subscribe to the newsletter to receive updates and advice direct to your inbox. Until then…

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Last Updated: March 1st, 2024

Phil Spencer

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