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House Price Index - Tentatively promising new year start as buyer and seller activity jump

CEO Khai Intela
Image: A graphic illustrating the House Price Index The real estate market is off to an encouraging start this year, with both buyers and sellers showing increased activity. This surge in momentum is a positive...

House Price Index Image: A graphic illustrating the House Price Index

The real estate market is off to an encouraging start this year, with both buyers and sellers showing increased activity. This surge in momentum is a positive sign for those looking to make a move in 2024. According to the latest data, average new seller asking prices have risen by 1.3% (+£4,571) compared to last month, reaching £359,748. While prices are still 0.7% lower than the previous year, this is the largest increase for January since 2020.

A Promising First Week

During the first week of the year, there was a notable increase in buyer and seller activity. The number of new properties entering the market for sale rose by 15% compared to the same period last year. Buyer demand also saw a 5% increase, indicating growing confidence among prospective buyers. However, it's important for sellers to price their properties competitively, as the number of new listings is outpacing the rise in demand.

Furthermore, the number of sales agreed during the first week of this year is a staggering 20% higher than the same period last year, reflecting a strong return of buyer confidence compared to the uncertain post-mini-Budget period in the past.

Early Signs of Movement

Rightmove, a leading property portal, has witnessed a surge in activity since Christmas, with nine out of its ten busiest days on record for people exploring Mortgage in Principle options to determine their borrowing potential. This early interest is a positive sign for those planning their moves in 2024.

Stability in the Mortgage Market

The average 5-year fixed mortgage rate currently stands at 4.86%, down from the peak of 6.11% in July 2023. This decrease, coupled with the anticipation of a first Base Rate cut since 2020 later this year, suggests a more stable mortgage market compared to the previous year's volatility. While surprises may still arise, early indicators suggest a calmer year ahead for mortgage borrowers.

Expert Insights

According to Tim Bannister, Rightmove's Director of Property Science, "After a stop-start market in 2023, the initial signs suggest a smoother year for movers in 2024. More new sellers are now entering the market, and with more confident pricing. While the increased level of buyer activity that we're also seeing may justify some of this increased pricing confidence from sellers, it's important that sellers who are keen to find a buyer don't get carried away with New Year enthusiasm when setting their price expectations."

Growing Confidence

Although it is early in the year, both buyer and seller activity has significantly increased compared to the same period last year. Potential buyers have shown a 5% higher interest in homes for sale, with London and the North East experiencing the strongest growth. Additionally, the number of properties coming to market has risen by 15% since the beginning of last year, with the North East and South West seeing the largest increase in available choices. However, it is crucial for sellers to price their properties competitively to attract buyers, considering the higher number of new listings compared to buyer inquiries.

Reassurance for the Market

The most promising early indicator for 2024 is the 20% increase in sales compared to last year. This demonstrates that sellers have set attractive prices that entice buyers who were hesitant to commit during the uncertain times of the past. With mortgage affordability becoming more stable, there are favorable conditions for both buyers and sellers.

Agent's Perspective

Chris Rowson, Managing Director at Sharman Quinney, shares his optimistic outlook, stating, "It's certainly cold out there at this time of year, but the housing market is just heating up. We've had a really promising start to the year, with some very positive signs. Future sellers are getting their valuation appointments booked in, future buyers are enquiring and getting their viewings booked in, and we're also seeing really high demand for mortgage appointments, as movers seek to understand their affordability and position at the start of the year."

Paul Bayliss, Director at The Square Room Estate Agents, adds, "It's been a busy January so far, which has actually followed a busy end to 2023 for us, even more so than over the summer, which is unusual. The key thing is mortgage rates, and with rates coming down from July and into the start of 2024, we can see buyers have got more confidence. We've seen a lot of activity from first-time buyers, now ready to make their move at the start of the year, and with mortgage rates more settled, we're also starting to see upsizers return who are now more confident to take out a larger mortgage for a bigger home. The market is just getting started, but we're optimistic about what 2024 can bring."

In conclusion, the real estate market's optimistic start to the year indicates a more stable and active environment for buyers and sellers. Increased buyer demand and a rise in new listings provide an encouraging outlook for a successful 2024.