Where are we now? An insight into the housing market
Let's take a closer look at the current state of the housing market and try to answer the question on everyone's mind: where are we now?
As we enter the second quarter of 2024, it's time to reflect on the state of the housing market. According to Rightmove, there has been a surge in new sellers during the Easter season, indicating a strong demand for property. Additionally, Zoopla's March House Price Index shows that the fall in house prices has slowed to -0.3%. But what does this all mean for the future of the housing market?
Surge in new sellers
Rightmove, the UK's premier property site, reported that 28 March marked this year's peak in new seller listings. This day was eclipsed only by Boxing Day of 2022 and 2023, making it the third largest influx of new properties since August 2020. Property listings on 28 March saw a 45% increase over the previous week, indicating sellers' eagerness to engage buyers during the Easter holidays.
Zoopla's insight into housing prices
In February 2024, the UK's average house price stood at £263,900, as reported by Zoopla in March 2024. This reflects a modest increase of £200 from the preceding month, despite a slight decrease of £900 (-0.3%) compared to the same time last year. Across all regions, there's a notable increase in house price inflation compared to six months prior. The housing market is experiencing a resurgence in sales volumes and a stabilisation of price levels nationwide. It is anticipated that these patterns will persist into the latter half of 2024, adapting to heightened mortgage rates and diminished purchasing power.
Zoopla's latest House Price Index indicates a universally positive trend in housing market activity as of March 2024. Compared to the previous year, the number of confirmed sales has risen by 9%. The first quarter of 2024 saw a 7% increase in sales relative to the same quarter in 2023, signalling a robust market. This surge in completed sales is prompting a greater number of homeowners to list their properties for sale. In the past month, estate agents reported an 11% increase in listings over the previous year, culminating in a 20% rise in available properties market-wide.
The rise in the housing market's mood stems from accelerated real wage growth and a healthy employment sector, which, in turn, are bolstering consumer confidence. Recent findings from the GfK Consumer Confidence survey reveal a peak in financial optimism not seen in over two years. Concurrently, the average interest rate for a five-year fixed-rate mortgage at a 75% loan-to-value ratio has decreased to 4.4%, a significant drop from the 5.8% peak in June 2023.
Future outlook: What's next?
Even with growing optimism and increased transactions within the market, buyers continue to exhibit price sensitivity, actively engaging in negotiations. In March 2024, 41% of completed sales were finalised at least 5% below the original listing price. Reflecting on the final quarter of 2023, this proportion was slightly higher, nearing half of all transactions, yet it persists at a level considered high by historical measures. This trend underpins the expectation that housing price inflation will largely stabilise throughout 2024.
The gap between listing prices and final sale prices is gradually decreasing, further indicating an improvement in market conditions. By November 2023, the median sale price was 4.5% below the asking price, equating to a financial difference of £14,250. The latest data from Zoopla's March 2024 House Price Index reveals an average discount of 3.9% or £10,000, marking the smallest discrepancy since July 2023 and mirroring averages seen before the pandemic. The narrowing of this gap signifies a shift towards more pragmatic pricing by sellers and a boost in purchaser confidence.
During the initial months of 2024, the typical estate agency portfolio included nearly 30 properties, matching the pre-pandemic supply levels and thus providing buyers with a variety of options and negotiation leverage, particularly for listings that don't quickly attract offers. Zoopla's findings indicate that a third of listed properties have remained on the market for over three months without a price adjustment from their initial listing.
Such stagnation signals that for sellers to leverage the improving market dynamics effectively and achieve sales in 2024, realistic property prices are crucial. Properties lingering on the market for extended periods emerge as prime candidates for price reductions to spur buyer interest, though any adjustments must align with the seller’s financial requirements for their next property acquisition.
What does that mean for you?
If you want to understand what the current housing market conditions mean for you and your property, get in touch with our expert team. We specialise in people, so we can help guide you from start to finish, and give you support in making the move as easy and seamless as possible.
Call 01843 222701 or email client.services@oakwoodhomes.biz.