Navigating the New Equilibrium: A Promising Outlook for the UK Property Market in 2024.
Recent data indicates that the UK property market has now reached a state of equilibrium, since the turbulent times of 2023. There seems to be a lot more positive news in the realm, with most articles and bodies predicting good growth:
The S&P Global Composite PMI Index has suggested, based on their information, that the UK economy staged an early recovery from a technical recession in the second half of 2023. This assertion has been corroborated by numerous additional sources, including the ONS, BCoC, and Financial Times.
In February, UK Mortgage Approvals surged to their highest level in 17 months, as indicated by combined data from the ONS and the BoE. This notable increase, surpassing predictions by 10%, underscores a significant indicator in the market. It signals a sensitivity to rates, with banks reducing lending rates and enticing people back into the market. Confidence plays a pivotal role in this resurgence.
In February 2024 alone, there were over 60,000 mortgage approvals—a figure closely aligned with the typical range of monthly mortgage approvals, which typically falls between 60,000 and 70,000, depending on seasonal variations. With rate reductions anticipated throughout the year, I anticipate a surge in mortgage offers as consumer confidence continues to rebound.
UK House prices dropped every so slightly month on month, however that’s following five consecutive monthly increases ,according to Halifax. This is very unsurprising; Examining HPI data from Halifax and Nationwide (The two biggest UK lending groups), March and April typically tend to have reductions as most people agreeing deals in November and December, do so with discounts as Vendors are looking to be ‘under offer’ before the festive season. These agreed deals generally complete in March & April, and even May too. This shows more consistency with the usual housing markets, and follows general trends shown over the decade also.
Data released from Rightmove, the renowned platform for listing UK housing stock, indicates that on March 28th, 2024, there was the highest level of new instructions—sellers entering the market—seen this year. This figure ranks as the third-highest level since 2020, trailing only behind two Boxing Day occurrences. Such a surge suggests a highly transactional market environment, wherein sellers are actively entering the market. However, it also underscores the need for these sellers to consider their own transactions as they seek new homes.
In summary, we're observing a relatively gentle landing in the housing market following forecasts of a crash. In my opinion, this presents an opportune moment for both buyers and sellers. Confidence is steadily returning across various indicators, and affordability has notably improved, with the house price-to-salary ratio decreasing. While it's essential to remain vigilant, now is the time to actively pursue opportunities and capitalize on the favourable market conditions.
References
NIESR (2024) UK economy on the road to recovery in 2024 following the mild recession - NIESR. https://www.niesr.ac.uk/publications/gdp-tracker-recovery-mild-recession-uk-economy?type=gdp-trackers.
Stevens, S. (2024) Inflation Still Likely to Fall to 2 per cent or Below Next Month. https://www.niesr.ac.uk/blog/inflation-still-likely-fall-2-cent-or-below-next-month.