The recent resurgence in the property market has brought about a promising shift in dynamics, with both buyers and sellers demonstrating a renewed vigor in their engagement during the month of February. This positive momentum is expected to have a lasting impact, contributing to a projected 10% increase in home sales over the course of the entire year, based on the latest insights provided by the property website Zoopla.
Zoopla’s comprehensive report highlights that across various metrics of market activity, February 2024 outperformed the same period in 2023. Notably, agreed sales experienced a significant and noteworthy uptick of 15%, indicating a substantial increase in transactions. Concurrently, buyer demand surged by an impressive 11%, underlining a robust interest in the property market.
These encouraging trends collectively poi nt towards a promising trajectory for the property market, with an anticipated total of 1.1 million transactions expected for the year. This represents a notable uptick from the 1 million transactions recorded in the previous year, showcasing the resilience and recovery of the real estate sector.
In conclusion, the property market’s positive performance in February, as reported by Zoopla, paints an optimistic picture for the overall trajectory of the real estate sector in the upcoming months. The sustained interest from both buyers and sellers, coupled with significant increases in agreed sales and buyer demand, positions the market on a path to surpass the transaction numbers recorded in the previous year, marking a noteworthy recovery and revitalization of the property landscape.
Although the overall UK market witnessed a slight dip of 0.5% in prices year-on-year, regional variations were evident. Scotland, Northern Ireland, Wales, the Midlands, and the north of England experienced price increases. Conversely, the south of England saw a decline, with the east of England recording a 2.1% drop. Notably, Belfast stood out with a 4.3% rise in prices.
The areas witnessing price falls were predominantly those with higher price points, where buyers grappled with affordability issues due to escalating mortgage rates and increased living costs.
During the preceding summer, fixed-rate mortgage rates reached their highest levels since 2008, responding to an upward shift in the base rate. Subsequently, the Bank of England halted rate increases post the move to 5.25% in August. The subsequent drop in mortgage rates, coupled with an increase in household incomes, fueled the upswing in market activity, according to Zoopla.
Sarah Coles, Head of Personal Finance at Hargreaves Lansdown, acknowledged the positive momentum for sellers but cautioned that the housing market still faces significant challenges. Coles highlighted the impact of falling mortgage rates at the end of 2023 and the beginning of 2024, emphasizing that these rate reductions played a crucial role in boosting market optimism. However, with rates starting to rise again, buyers may exercise caution.
Coles noted that in the south, excluding London, the market reflects the consequences of substantial price hikes over the past few years. Affordability issues persist, leading to significant drops in asking prices.
Despite the positive trends, there are concerns on the horizon. The report from Zoopla indicated that lenders are withdrawing the cheapest sub-4% mortgages. Buyers are advised to brace for 4-5% mortgage rates throughout much of 2024. This aligns with expectations of flat to low single-digit price rises. The anticipation of higher mortgage rates raises the possibility of some buyers hesitating in their property pursuits. While the surge in market activity is encouraging for sellers, challenges persist in the form of affordability issues, regional price disparities, and the impending rise in mortgage rates. The resilience of the property market will likely hinge on how effectively these challenges are navigated in the coming months
