January 2024 Market Update – New Year, New Home?

Initial signs of the 2024 property market show promise as buyer and seller activity jumps in the New Year market. Add to this the improving mortgage rates as the average 5-year fixed mortgage edges below 5%, and we have a tentatively positive outlook for the year to come…

The start of 2024 has seen a jump in activity from both buyers and sellers. The number of new properties coming to the market is up 15% on the same period last year, while buyer activity levels are up 5% when compared with the first week of January in 2023. However, buyers remain price conscious and look for value for money in the property they view. So, its still massively important to price your property right from the get-go in order to get buyers through the door – after all you won’t be getting any offers if you’re not getting viewings. Therefore, setting an ‘attractive’ price is key to generating interest in your property. Having experienced and knowledgeable negotiators on your side makes all the difference in the current market. To maximise your sale price, an experienced negotiator is key to getting potential buyers to increase from their initial offers.

Along with the increase in activity, we have seen a positive impact in the number of property sales, with the number of sales being agreed at the start of this year up 20% on the start of 2023. While this is a positive indication for the market to come, it is also a sign of the benefits of sellers pricing their property competitively at the end of last year to attract buyers during a more hesitant market.

Mortgage rates have begun to fall below 4%, with major providers such as HSBC, Santander & Halifax starting the year off with significant cuts. The jump in buyer activity is to thank, with lenders competing against each other to attract new clients, as well as the changes in the Bank of England’s base rate. The belief among economists that the inflation rate has peaked has lead to the Bank of England freezing base rate increases, locking the base rate at 5.25% for three consecutive months. Economists believe the Bank of England will begin to cut interest rates into Spring and Summer. This has allowed lenders to start the year off with significant cuts, bringing more buyer activity to the market, as taking out a mortgage becomes less daunting for many. Some mortgage products available have dropped below the 4% mark and the average 5-year fixed mortgage now sits at a rate of 4.86%, which is the lowest average rate we have seen since the mortgage rate peak of July.

So, what does this look like in terms of prices? In the South East we have seen a 2.4% increase on last month, with the average new seller asking price across the UK increasing by 1.3% to £359,748. While it is normal to see a slight price increase from December to January due to the quieter Christmas market, this is the largest price increase in a New Year market we have seen since 2020, and over 2x the 20-year average for this period of 0.6%. The largest increase in new seller asking prices lies in the top-of-the-ladder sector, with a monthly increase of 2.5%. Properties in the first time buyer sector have seen a monthly increase of 1.1%, while second steppers have gone up by 0.8%. Compared with this time last year, average property prices are marginally down by 0.7%. However, when we break this down into market sectors, we can see that the largest properties are impacting this year-on-year decrease most, with a change of -2.0% when compared with the same time last year. First time buyer level properties are now on par with the prices seen last year with a 0.0% annual change, while second stepper properties have an annual change of -0.5%. This is a result of the realistic & competitive pricing of new property coming to the market with sellers heeding their agent’s advice as the market continues to recover.

These are some very positive early indicators for the market to come, but are there any predictions for later in the year? A general election is expected in the later half of 2024, which historically has caused a slowing of the market in the weeks on the run-up as buyers and sellers wait to assess how the outcome may impact their moving plans. Rightmove’s mortgage service, which launched in 2022, is showing very positive signs for the year to come as January is on course to be the busiest month since the service launched for buyers beginning their mortgage applications. This indicates a nice and healthy level of activity for homebuyers looking to make their move in 2024.

Moving house is a big deal – so why not let us guide you through the process. We’d be delighted to hear from you and happy to offer the right advice without any obligation. Call us on 01323 440678 to put your 2024 plans in the best hands.