Your monthly UK housing market update – including sold and asking prices, RICS surveyor sentiment and predictions for the year ahead.
In the twelve months to November 2023, average sold prices decreased by -2.1% – falling from -1.3% up to October 2023.
On a non-seasonally adjusted basis, prices fell by 0.8% between October and November. This compares with a flat trend the same time last year.
The North East saw the smallest price drops, at 0.4% in the twelve months to November. At the other end of the spectrum, London prices fell by an eye-watering -6%.
As we’ve seen in previous reports, the Bank of England blamed high mortgage rates for ongoing weakened market activity. Indeed, the supply of new properties is now higher than demand, an imbalance that’s unlikely to improve until mortgage rates fall drastically.
Reflecting weakened demand, property transactions were -21.5% lower in November 2023 than the previous year. Despite this, mortgage approvals (a good indicator of future borrowing) looked more promising. They rose from 47,900 in October 2023 to 50,100 in November 2023.
The average asking price on Rightmove increased by 1.3% from December 2023 to January 2024.
Reflecting a rise of £4,571 (to £359,748), this is the largest monthly increase since January 2020. It’s also more than double the average of +0.6% seen over the last twenty years.
Even with these record rises, asking prices are still -0.7% behind last year – showing sellers are pricing realistically in a recovering market.
Both supply and demand are gradually increasing though. New buyer enquiries were 5% higher in January than the same time last year. The supply of new properties also jumped massively, at 15% more than the year before. In fact, a record number of sellers launched on Boxing Day, fresh for the year ahead.
In more good news for 2024, agreed sales were 20% up in January. Since 27 December, Rightmove saw ten of its busiest ever days for buyers seeking a mortgage in principle – suggesting further upticks in activity to come.
In the latest RICS survey, chartered surveyors point to gradually improving market activity.
Driven by the recent easing of mortgage interest rates, sales expectations for both three and twelve-months have picked-up for the second month in a row. At +12% and +34% respectively, it’s a highly positive indicator.
The net balance for new homes was pretty much stable at +1%. While this means stock levels are still historically low, they are starting to improve.
In addition, new buyer enquiries for December came in at the least negative reading (-3%) since April 2022. Compared with -13% the previous month, it’s a pretty significant rise.
Nonetheless, house prices are still falling. December’s net balance of -30% is much better than previous months though, with November and October at -41% and -60% respectively.
As a result, RICS respondents predict relatively flat price trends for the rest of 2024.
In Zoopla’s outlook for the year ahead, they note that falling mortgage rates are welcome news for the housing market.
Even so, rates aren’t likely to fall much further in the near future. Zoopla predicts they’ll stay around 4-5% with the best deals reserved for buyers with large deposits.
This should mean prices stay relatively steady and sales volumes increase during 2024 – hopefully leaving the lows of 2023 behind.
Despite this, it remains a buyer’s market, with increased supply of new properties (especially larger family homes) keeping prices in check. Higher mortgage repayments will also mean buyers remain price sensitive.
So even with improved market conditions, sellers keen for a quick sale in 2024 must continue pricing realistically.
For a full, comprehensive breakdown of current property market activity. Visit our Express Index here
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