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The housing market is off to an encouraging start in the new year, with both buyers and sellers showing increased activity compared to the same period last year. This indicates a return of confidence, especially compared to the unsettled post-mini-Budget period. It seems that more prospective buyers and sellers are taking the initiative to kick-start their moving plans early in 2024.
Promising Signs of a Stable Year
According to Rightmove's data, the average price of newly listed properties has risen by 1.3% (+£4,571) this month, reaching £359,748. This marks the largest January price increase since 2020 and is more than double the 20-year average (+0.6%). Although average asking prices are still 0.7% lower than last year, it's worth noting that many new sellers are being realistic about their expectations as the market continues to recover from the impact of volatile mortgage rates. However, the surge in the number of properties coming to the market and this month's substantial price rise also indicate that new sellers are more confident about the year ahead.
Tim Bannister, Rightmove's Director of Property Science, shares his insights, "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. Elevated mortgage rates and the wider cost-of-living squeeze are still limiting buyers’ spending power. Accurate and realistic pricing for their local area is the recipe for success for sellers looking to get moving in 2024, and it’s been proven that over-optimistic pricing makes a move much less likely."
Growing Buyer Confidence
The early snapshot of 2024 reveals a significant rise in both buyer and seller activity compared to the same period last year. The number of potential buyers contacting estate agents about homes for sale in the first week of 2024 was 5% higher than in the same period the previous year, with the growth in activity particularly strong in London and the North East.
The number of properties coming to the market for sale is also 15% higher than at the start of last year, following a record number of sellers launching on Rightmove on Boxing Day. The North East and South West have seen the greatest increase in new choices for the growing number of buyers. While the market hasn't been flooded with homes for sale, the total number of available properties is just 1% above the more normal market levels of 2019. Nonetheless, it's crucial for sellers to price competitively even with this surge in buyer activity, as the number of properties coming to the market is outpacing the rise in the number of buyers enquiring.
Sales Agreements on the Rise
One of the most positive indicators for 2024 is the 20% increase in the number of sales agreements at the start of the year compared to the same period last year. This suggests that sellers are pricing their properties attractively enough to entice buyers who were hesitant to commit a year ago when mortgage rates and buyer affordability were much more uncertain.
Stable Mortgage Market
Since December 27th, Rightmove has observed nine of its ten busiest days for prospective movers inquiring about getting a Mortgage in Principle. This service allows them to determine how much they are likely to be able to borrow from a lender and, consequently, the type of home they may afford. January is on track to be the busiest month for people seeking a Mortgage in Principle on Rightmove since the service was launched in 2022. Although it's still early days, this is yet another positive sign of future movers getting their 2024 budgets and plans in order.
The average 5-year fixed mortgage rate has decreased to 4.86% from the peak of 6.11% in July last year. With some best-buy rates approaching 4% and an anticipated first Base Rate cut since 2020 later this year, the mortgage market is expected to provide a more stable backdrop compared to the previous year.
Tim Bannister concludes, "Rightmove’s whole-of-market data puts us in a position to see the very earliest signs of activity in the market, and the number of new listings, buyer enquiries to agents, and sales being agreed are encouraging early indicators. Combined with our more recent Mortgage in Principle data, the numbers suggest that many are taking action to make their move in 2024, perhaps including some who paused last year due to the more unsteady mortgage market. A General Election is expected to be held during the second half of 2024, and traditionally we see a temporary slow-down in activity in the weeks before an election, as movers wait for the outcome and assess any impact that it may have on their housing plans. It will be important to keep a careful eye on this and on the impact of other economic news this year, but for now the data at the start of 2024 points to building momentum and reasons for growing market optimism."
Agent's Perspectives
Several agents also provide their insights into the current state of the market:
Chris Rowson, Managing Director at Sharman Quinney in Cambridgeshire, shares, "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. Most importantly, we’re seeing offers being made, and a high number at that. It is early days and not a time to get carried away, but we’ve had a good start."
Paul Bayliss, Director at The Square Room Estate Agents on The Fylde Coast, 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."
The housing market's tentatively promising start to the new year, with increased buyer and seller activity, suggests that 2024 could be a stable and optimistic year for the industry. The growing confidence among buyers, coupled with a surge in properties coming to the market, indicates positive momentum. However, realistic pricing and careful monitoring of economic factors will play a crucial role in ensuring sustained growth throughout the year.
