17/07/2024
Time To Move?
The housing market has shown remarkable resilience despite higher mortgage rates and cost of living pressures. Increased sales and a surge in sellers indicate growing confidence among households, suggesting that mortgage rates of 4-5% are not hindering the improvement of market conditions.
Recent data from Zoopla reveals a return of buyers and sellers to the housing market, projecting a boost in property sales by at least 10% this year. This translates to 1.1 million homes being sold, which experts describe as a continuing resurgence. House prices are also on the rise compared to a year ago, signaling positive news for both buyers and sellers. The data suggests the market is returning to normal across almost every UK region.
The survey highlights a 15% increase in house sales in recent weeks, a stark contrast to the decline in mortgage rates seen in 2023. Sales of homes have risen by 11% since then, while the number of properties on the market has increased by 21%, indicating a faster-than-expected recovery.
This analysis is supported by the Royal Institution of Chartered Surveyors (RICS), which reported new buyer enquiries at +7% in January, a significant increase from -3% in December. However, despite improved activity levels, buyers remain cautious, only moving forward when they find the right property at the right price. Experts note that the market is operating at two speeds: some sellers are setting prices too high and needing to reduce them later, while those who price accurately from the start are selling more quickly. Nonetheless, it is still taking over two weeks longer to sell a home compared to the same period in 2023.
The Bank of England, having paused rate increases after raising them to 5.25% last August, indicated that buyers should expect 4-5% mortgage rates throughout 2024, with flat to low single-digit price rises. It’s important to note, however, that the cheapest sub-4% mortgages are being discontinued by lenders. While this may seem like a setback for borrowers, it remains a significant improvement from the rapid and steep increases experienced last summer.
Sources: The Times, Mortgage Strategy, City A.M. Club
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