Market Comment (April 2024)
Welcome to our April 2024 Market Comment, where we're diving into the latest news surrounding the UK housing market as we bid farewell to April and welcome the blossoming days of May. With spring in full swing, it seems like the property market is also experiencing a revitalisation.
Rise in supply of property creates optimism
Landmark's Q1 Residential Property Trends report paints a cautiously optimistic picture of the UK market, with supply up 5% from 2019 levels, hinting at a potential boost in demand for Q2. Despite a rise in competitively priced mortgages, affordability issues persist, resulting in a 40% drop in sales compared to 2019.
High valuations at the start of the year saw January and February volumes jump by 20% and 15%, but March cooled as lenders adjusted prices, indicating market reactivity.
Simon Brown, CEO of Landmark Information Group, said: “This quarter has seen a continuation of the green shoots of recovery we saw towards the end of last year, with stronger listings painting a positive picture for the summer. Despite this cautious optimism, it’s clear that the market still needs stability, reacting more extremely to volatility in mortgage rates than we would typically see in a healthy market. If rates decrease – and then crucially, stabilise for a sustained period of time – there are clear indications that pent-up demand could start to flow through into the summer period.”
Homes are selling faster than pre-COVID times
Recent insights from Home.co.uk highlight a robust recovery in the UK property sales market, signalling confidence post-interest rate shocks. Properties are selling faster compared to pre-COVID times, with modest year-on-year price growth indicating a balanced supply and demand.
Notably, regions like the South West and Yorkshire have seen significant price hikes, driving up the average by 1.7% and 1.6% respectively. This trend extends to the North East, Wales, and West Midlands, with month-on-month price increases exceeding 1%. While such rapid hikes may outpace current demand, reduced time on the market suggests sellers are pricing confidently.
Positive market sentiment is evident in a 12% increase in new listings compared to last year, providing buyers with more options. Demand is also on the rise as hesitant buyers return, encouraged by price stability and diminishing interest rate concerns. However, the North/South divide persists, with northern regions outpacing the South in annualised growth.
Are you uncertain about the home-buying process?
New research from Zoopla reveals that about 2.2 million potential homeowners in the UK feel uncertain about the home-buying process and its associated terms, hindering their purchasing decisions. A staggering 43% of non-homeowners lack confidence in their understanding of buying a home, with 27% admitting this uncertainty has deterred them from taking the plunge.
Understanding mortgage terminology remains a significant challenge, with 20% of all UK adults unable to confidently describe a mortgage and 9% struggling with key terms related to home-buying. Surprisingly, despite ongoing media coverage, 24% of adults couldn't differentiate between fixed-rate, interest-only, and offset mortgages, while only 43% correctly identified an interest-only mortgage. Terms like 'gazundering', 'disbursements', and 'covenant' are also widely misunderstood.
Moreover, misconceptions about stamp duty persist, with only 45% confidently describing it and 18% incorrectly believing it's unavoidable. Zoopla underscores the importance of informed decision-making and offers a step-by-step guide to empower potential homebuyers, aiming to demystify the process and ensure confidence throughout.
Daniel Copley, Consumer Expert at Zoopla, says: “The research shows that many UK adults - including those who already own a home - have a significant lack of knowledge when it comes to what even the most basic and commonplace home-buying terms mean. It’s usually presumed that finances are the reason someone doesn’t own their own home, but the figures show that for millions of people, it could also be a lack of knowledge that is holding them back.”
If you feel as though you need help in understanding the housing market, contact Trading Places, and we will be happy to help you.
If you would like to learn more about Leytonstone, what the area has to offer, and how to achieve your goals in the local property market, we can help. To arrange an appointment, call us on 020 8558 1147 or send us an email at info@tradingplacesproperty.com
You will find Trading Places Estate and Letting Agents at 46 Church Lane, Leytonstone, London, E11 1HE; and we look forward to assisting you.
Click here for an online Valuation (a starting point)
Click here for a Desktop Valuation (a more detailed option)
Click here to book a Home Visit Valuation (the full works)