"Sellers who are serious about moving this year would be well-advised to ride this wave of increased buyer confidence with an attractive asking price before any pre-election jitters or unexpected events dampen the momentum"
- Tim Bannister - Rightmove
Average new seller asking prices have risen by 0.9% (£3,091 in real money) this month to £362,839, in line, so Rightmove points out, with the seasonal rise we’d expect to see in February.
It's worth noting here that average prices are now up by 0.1% compared to this time last year, following annual falls in every month since August 2023 - a further sign of growing market momentum.
The number of sales agreed in the first six weeks of the year is 16% higher than in the same period last year, indicating that early-bird buyers feel that 2024 offers the right market conditions to move, and they are already seizing the opportunity.
Yet the market remains very price-sensitive, with properties that are priced accurately being snapped up by buyers and those with over-optimistic price tags left on the shelf, potentially missing out on the all-important Spring moving season.
Rightmove’s Tim Bannister says: “We said that February would be an important indicator for the year ahead, and the question was whether the Rightmove Boxing Day bounce in buyer activity would keep its spring into March or lose momentum.
"It's proved to be the former, with the number of sales agreed continuing to considerably outstrip last year. Early-bird Boxing Day buyers got a head start in cherry-picking from a record level of new property choices and have now been joined by many other buyers who also believe that 2024 offers the right market conditions to move.
"Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023. Momentum to move in 2024 is continuing to build, but prospective sellers mustn’t get carried away.
"Buyers now have more choice of property for sale and many are still very price-sensitive, with mortgage rates remaining elevated. Sellers who are serious about moving this year would be well-advised to ride this wave of increased buyer confidence with an attractive asking price before any pre-election jitters or unexpected events dampen the momentum.”
Sales
Sales agreed numbers are being supported by more buyer and seller activity. During the first six weeks of 2024, the number of properties coming onto the market was 7% higher than the same period last year, while the number of buyers enquiring to estate agents was 7% higher.
The number of sales being agreed is now 3% higher than at this time in 2019, as these numbers continue their transition towards more normal levels.
Two-speed market
Despite these positive activity numbers, the market appears to be operating at two speeds. Some agents report that properties that are accurately and competitively priced are being snapped up by budget-conscious buyers who are keen to make 2024 their year to move, having paused during the uncertainty of 2023.
However, properties that are over-priced will immediately stand out against more competitively priced neighbours and are being ignored by price-sensitive buyers. Evidence of this is that despite higher activity levels than last year, it’s now taking an average seller 16 days longer to successfully find a buyer than at the same time last year.
The time to find a buyer is at its slowest since 2015, excluding the initial lockdown months of April and May 2020. Buyers now have more time to consider which property is right for them, making it even more important for sellers to price temptingly and stand out from the crowd.
Rightmove analysis also shows that sellers who price right initially are far more likely to find a buyer and sell more quickly.
As the 2024 Budget approaches, the data indicates that the first-time-buyer sector is most in need of government support, with buyer activity levels and sales in this sector the least improved compared to last year.
While the mortgage market has recovered its stability, there are growing signs that the room for lenders to reduce rates further is narrowing and that rates will settle at elevated levels shortly.
On top of this, inflation and cost-of-living pressures remain, making saving up a large enough deposit challenging for would-be first-time buyers.
Tim Bannister concludes: “There continue to be reasons for cautious optimism as we settle into 2024, with encouraging activity levels and a more stable housing market.
"While some would-be buyers will continue to be affected by elevated mortgage rates and major affordability constraints, many other prospective buyers who can afford to do so, have acted fast and demonstrated their belief that 2024 is their year to get moving. It is still early days for 2024, with a Budget, General Election and no doubt more global events still to play out.
"With the Budget up next, the government will be considering a range of options to support movers and we expect to hear more policy rumours as the date approaches.
"Rightmove’s whole-of-market data shows that it’s the first-time-buyer segment who could use the most support this spring, and well-thought-out initiatives to help get more would-be first-time buyers onto the ladder would be welcome.”
Simon Gerrard, Managing Director, Martyn Gerrard Estate Agent, said: "We’re certainly seeing a recovery of the housing market so far in 2024, and the figures today reflect the increased levels of registered interest in buying or selling homes that we’ve received. Calmer economic conditions and falling mortgage rates from several major lenders have made a considerable difference in people’s ability to purchase property.
"The recent figures showing that the UK economy is officially in a recession may worry some, but the Bank of England has held the base interest rate and hopefully, provided inflation remains under control, we will see the base rate dropped sometime this year. When we do, growth will be the new normal and activity in the housing market is only set to increase.
"The real-time situation in the property market has perhaps been overshadowed by the recent government announcement that it would be relaxing planning rules and attempting to boost development in urban areas. But we’ve heard this from the government before, and time and time again these policies have fallen into the void of meaningless soundbites that have no real action to back them up.
"The government’s pledge to force local councils to cut red tape and favour development is laughable. It has failed for over a decade to bring local councils and planning inspectorates in line, leading to a market that is presided over by these NIMBY councils whose primary aim is to block any increase in housing stock at every opportunity, propped up by a government that is too weak to take action.
"The churn of ministers in charge of the housing brief has only shown that the government doesn’t care about building homes, and it clearly has no understanding of how to actually encourage development."
