Exciting developments are underway in the property market, with recent statistics indicating a significant uptick in buyer demand, marking a notable 14% surge in property seekers actively engaged in the market*. This surge prompts reflection on the driving factors behind this heightened interest and its implications for prospective buyers and sellers in 2024.
Interest rates
Delving deeper into the dynamics, the prolonged elevation of interest rates throughout much of 2023 sparked uncertainty among potential buyers regarding the possibility of further increases, leading many to delay their property pursuits. However, as the year unfolded, a shift began to emerge, with the Bank of England maintaining rates at a steady level for three consecutive periods. The turn of the new year brought a wave of optimism as several lenders slashed their mortgage rates, with some banks even dipping below the 4% mark on their five-year fixed deals**.
This newfound clarity and favorable landscape are expected to prompt more cautious buyers, particularly those in rental accommodations, to transition into action mode. As a result, the surge in activity is anticipated to not only boost market demand but also catalyze an increase in supply. With some buyers entering the market for the first time and others needing to sell their current property to facilitate their transition, the resultant uptick in sellers translates into expanded options for buyers.
Resilience
Moreover, the market’s resilience in the face of dire predictions and looming threats, such as repossessions and price crashes, underscores its strength. Government intervention following the 2008 banking crisis played a pivotal role, tightening mortgage lending regulations to curb reckless borrowing and mitigate housing market bubbles. Recent data from Zoopla further reinforces this resilience, indicating an 18% increase in the average UK home value compared to pre-lockdown levels in March 2020.
In conclusion, for those contemplating property investment, the evidence points towards a positive trajectory, highlighting the viability and potential for growth in the market.
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* Source: Zoopla, comparing activity in the first week of January 2023 with the same time in January 2024.
** Lending conditions apply.
