UK Property Market Sees Encouraging Beginnings in 2024

Apr 16, 2024

As we move through 2024, the UK Property Market is significantly changing, moving away from post-pandemic trends. Economic factors, shifts in buyer sentiment, and the housing sector’s resilience are key in shaping the market. We’re seeing a positive trend in mortgage rates, indicating a more accessible and confident housing market.

This is good news for first-time buyers, real estate investors, and those seeking mortgages, as affordability issues start to decline. The market’s increased accessibility is leading to cautious optimism among prospective homebuyers and analysts.

Early 2024 data shows a market rebound, with more buyer and seller activity and a rise in sales transactions compared to last year. With hopes of further interest rate cuts, sales volumes are expected to increase by 10%, reaching about 1.1 million transactions in 2024.

Key Takeaways

 

  • Economic shifts and improved mortgage rates are making the UK property market more accessible in 2024.
  • There is a growing sense of optimism among first-time buyers and real estate investors regarding market affordability.
  • Early data for 2024 indicates an upswing in market activity, with increased buyer and seller engagement.
  • Predictions suggest a 10% increase in sales transactions, aiming for approximately 1.1 million transactions throughout the year.

 

Improving Affordability

 

The latest Property Tracker report from the Building Societies Association indicates a positive shift towards more affordable homes. In 2023, 71% of prospective buyers were concerned about mortgage costs, now reduced to 62%. Similarly, worries about keeping up with mortgage payments have decreased from 12% to 9%, showcasing that owning a home is becoming less intimidating.

Additionally, the concern over future falls in property prices has dropped from 18% to 12%, the lowest in eight years. While 60% still cite raising a deposit as a significant barrier, unchanged since December, 41% expect house prices to rise over the next 12 months, up from 33% in December 2023. This marks the highest proportion expecting a price rise since June 2022, with only 14% believing prices will fall.

Market Sentiment in UK Housing Q1 2024

 

Sales agreements have increased by 9% from last year, with home sales agreements in Q1 2024 rising by 7% compared to Q1 2023. This has encouraged more sellers to list their homes, with listings up by 20%. The macroeconomic backdrop is favorable, with mortgage rates dropping to 4.4% for a 75% loan-to-value 5-year fixed-rate loan, down from the 5.8% peak in June 2023.

Market Sentiment and Future

 

According to the Building Societies Association, optimism is at its highest since June 2022, with 41% expecting house prices to increase. Lower mortgage rates have bolstered this confidence. Paul Broadhead, Head of Mortgage and Housing Policy at the BSA, highlights that strong wage growth and potential cuts in the Bank Rate are good news for market stability.

Mortgage Market Overview

 

Despite some volatility and a potential slowdown as the market awaits decisions on interest rates, the mortgage landscape shows signs of improvement. The average rate for a two-year fixed mortgage is now at 5.8%, down from last year’s peaks. This fluctuation is part of a larger trend towards more accessible mortgages.

The UK Property Market is on the brink of significant changes, with improved affordability and positive sentiment offering opportunities for buyers and investors. With favorable rates and economic support, now is the time to consider buying a home or investing in property.

In summary, the latest trends in the UK housing market point towards a more accessible and optimistic future for homebuyers and investors. With concerns around mortgage affordability decreasing, an upswing in positive sentiment, and more favorable economic conditions, the path to homeownership seems less daunting. The Building Societies Association’s report underscores a significant shift towards improved affordability and market sentiment, offering a beacon of hope for prospective homeowners. As mortgage rates become more competitive and the market stabilizes, now presents a promising window of opportunity for those looking to enter the property market.

FAQs

 

What are the main factors driving the positive changes in the UK Property Market in 2024?

The significant changes in the UK Property Market in 2024 can be attributed to several factors, including economic recovery post-pandemic, shifts in buyer sentiment towards optimism, improved mortgage rates making the market more accessible, and the overall resilience of the housing sector.

How has the affordability of homes in the UK changed in early 2024?

According to the latest Property Tracker report by the Building Societies Association, there has been a positive shift towards more affordable homes. Concerns around mortgage affordability have decreased, and worries about keeping up with mortgage payments have reduced, indicating that owning a home is becoming increasingly feasible for many.

Are UK house prices expected to rise or fall in the next 12 months?

In 2024, a significant portion of the market, 41%, expects house prices to rise over the next 12 months, which is the highest proportion holding this belief since June 2022. Only 14% anticipate a decrease in prices, showing a generally optimistic outlook on property values.

What is the trend in mortgage rates, and how does it affect the market?

Mortgage rates have been experiencing a downtrend, with the average rate for a two-year fixed mortgage decreasing from last year’s peaks. This reduction in mortgage rates is making the housing market more accessible and boosting confidence among prospective homebuyers, contributing to the positive sentiments surrounding the UK Property Market.

DISCLAIMER

This guide is intended solely for informational purposes and should not be considered as investment advice. For those in search of financial guidance, it is advisable to consult with a financial advisor authorised by the FCA, to receive regulated advice tailored to your investment choices.

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