Things Are Looking Up in the Property Market – Here’s Why
Good news: the latest data on buyer demand shows that the number of property hunters out in force is up by 14%*.
So, what’s driving this increased demand? And what does it mean if you plan to buy or sell in 2024?
Let’s take a look.
Interest rates
For a good chunk of 2023, interest rates were high (relative to recent years), and the possibility loomed that they could go even higher.
Many buyers, uncertain about where it would all end, were spooked and put their property-hunting plans on hold.
But in the latter part of the year, things started to shift. The Bank of England held rates steady three times in a row.
Then, a few days into the new year, there was further good news when many lenders dropped their mortgage rates.
Some banks even dipped below 4% on their five-year fixed deals** to woo customers.
With the situation now much clearer – and more positive – expect more wait-and-see buyers to act (especially if they’re renting).
This will not only create more market demand but also increase supply because while some buyers will be first-timers, others will have to sell a property to fund their move.
And more sellers means greater choice for buyers.
Resilience
Some dire predictions about what could happen in the housing market did the rounds last year.
Brace yourself for repossessions and an almighty price crash, some warned.
Thankfully, the doom merchants were wrong, and the market proved to be far more resilient than some expected.
This may partly be because the government tightened mortgage lending rules after the 2008 banking meltdown. The aim was to stamp out reckless borrowing and suppress housing bubbles, and it seems to have worked.
Recent data (released by Zoopla) shows that the average UK home is worth 18% more now than it was pre-lockdown in March 2020.
So, buyers wondering if property is still a good investment need be in no doubt.
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* Source: Zoopla, comparing activity in the first week of January 2023 with the same time in January 2024.
** Lending conditions apply.
