Strong seasonal uplift in buyer demand

We’ve seen a strong seasonal uplift in buyer demand in the early weeks of 2024. Signs of more stable market conditions this year will see an increase in buyers and sellers returning to the market with renewed confidence as interest rates drop and inflation heads downwards.

This year has started confidently as mortgage lenders race to offer lower interest rates. Rates fell for 20 consecutive weeks at the end of 2023, with average 5-year fixed rate mortgages now below 5% and some below 4%. Zoopla reports that sub 5% mortgage rates mean buyer demand is sitting 12% higher than a year ago. This reflects a return of pent-up buyer demand following a weak second half of 2023. Many buyers delayed moving in the face of rising mortgage rates. Now as mortgage rates are heading downwards, potential movers who have been waiting for calmer conditions are motivated to move early in 2024 and are ready to go.

The Nationwide’s latest House Price Index reports that house prices begin 2024 on an upbeat note rising by 0.7% in January. The lender also reports that there has been encouraging signs for potential buyers recently with mortgage rates continuing to trend downwards and signs of easing in affordability pressures. Investors are also becoming more optimistic that the Bank of England will lower rates in the months ahead.

Registration of First-time buyers have increased significantly, and these are increasingly drawing on help from family or friends on an inheritance to help raise a deposit with nearly half relying on this way of funding – up from 27% in the mid 1990s. Stamp duty savings are still in place until 31 March 2025, especially helpful for first-time buyers who will be further encouraged by considerably lower interest rates.

Rightmove reports signs of family movers returning, many of whom had put plans on hold in 2023 and are now motivated to move. Record rents are also being achieved says Rightmove and is predicting average rents will rise by 5% outside of London in 2024. The trend of supply improving, and tenant demand easing continues at the start of 2024, although the market is still very busy compared to pre-pandemic levels. However, early signs suggest a better experience for many tenants trying to secure a rental property in 2024. If you are thinking of selling or letting your property, please get in touch with one of our team below today.

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