JA NUARY 2024
£836,000
£1,261,779
-1%
£675
£38.3bn
16,785
MORTGAGE APPROVALS (NOV)
50,067
-4.9%
9.9%
RESIDENTIAL TRANSACTIONS (NOV)
80,780
-3.6%
-21.5%
GROSS MORTGAGE LENDING (NOV)
£16.6bn
-12.2%
-33.4%
60,988
2.8%
-5.7%
244,830
-
-4.3%
NEW HOMES BUILT (Q323) NEW HOMES BUILT (ANNUAL)
NEW YEAR, NEW MARKET
The Bank of England has left interest rates unchanged at 5.25%, reinforcing the view that the base rate has peaked, allowing buyers and sellers to plan ahead with greater confidence. DUST SETTLING The housing market has proved remarkably resilient in 2023, with prices defying predictions made at the start of the year. The average price of a property reached £287,782 in October, a decline of just 1.2% year-on-year and £7,000 higher than the recent low recorded in March last year (UK HPI). Prices appear to be steadying with monthly prices stable in the latest Nationwide and Hometrack indices (both at 0.0%), and Halifax showing an uptick of +0.5% in November. The property market is showing signs of having weathered the storm with mortgage approval numbers showing an uptick of 4.6% between October and November as buyers return to the market (Bank of England).
PRIME PRICES Across the prime markets of England and Wales the average price of a property is £1,261,779, down 1% from the same time last year. Annual price growth has moderated more significantly in London where the average cost of a property is higher and people are further stretched, and also in the North East. Contrastingly, annual price growth in prime markets across the North West, Yorkshire & The Humber, the East Midlands, East of England and the West Midlands is in positive territory.
INCREASING OPTIMISM Consumer confidence edged two points higher in December, amid easing inflationary pressures and rising optimism for the year ahead (GfK Consumer Confidence Tracker). In the face of growing market stability, swap rates have fallen for five consecutive months, providing confidence to lenders, with 5-year fixed-rate deals now being found for less than 4%.
The average five-year swap rate reached 4.32% in December, down from 4.48% in November and 5.25% in July (Octane Capital). Increasing stability in the mortgage market has led to growing activity levels, with agreed sales back to within 3% of their pre-pandemic (2017-19) average (TwentyCi). Available supply has also increased, up one quarter on last year, offering buyer choice and supporting sales (Zoopla). Sales expectations for the next three months have also improved, with a net balance of 6% of property professionals expecting to see an increase in transactions, the first positive reading since early 2022 (RICS). Although borrowers must adjust to a higher interest rate environment, confidence amongst buyers and sellers remains resilient, with those who want to move going ahead and doing so. Over half of vendors still think they will sell their home within the next three months, and 71% of buyers are confident they would purchase a property within the same timeframe (OnTheMarket).
FORECASTS Looking across the average of published house price forecasts, UK prices are predicted to soften further in 2024 (by an average -2.1%). Price growth is expected to resume in 2025, with prices forecast to rise by 3.0%*. Activity levels are also anticipated to pick up in 2025, with stable interest rates and improvements in the mortgage rates on offer having a positive impact on affordability. The main pressures on affordability appear to be peaking and gradual improvements are expected throughout 2024, with the bank rate forecast to fall to 4.7% by the end of the year**. *Dataloft, HM Treasury (independent average), Nationwide, CBRE, Savills, Knight Frank, Right move, JLL, Chestertons ** HM Treasury (average of independent forecasts)
£404,000 £545,742 -2.6% £291
£519,000 £722,481 +2.2% £374
£588,000 £779,876 +0.8% £389
£532,000 £700,532 +0.5% £344
£480,000 £627,400 -1.5% £338
£773,000 £1,058,781 -0.8% £506
£507,000 £687,506 +0.5% £356
£830,000 £1,144,646 +0.2% £544 £999,000 £1,442,837 -0.6% £605
£1,700,000 £2,797,143 -2.6% £1,320
12% 10% 8% 6% 4% 2% 0% -2% -4% DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
NOV 2023
£1,200 £1,050
£ 1,090
£900 £750 £600
£ 752 £ 633
£450
£ 673 £ 591
£300 £150 £0 DETACHED
SEMI-DETACHED
TERRACED
FLAT/APARTMENT
ALL PROPERTY
0% -5% -10% -15% -20% -25% -30% -35% -40% NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
£269,613 £836,000 £1,261,779
£222,633 £733,000 £1,178,301
£213,885 £679,000 £1,074,664
£268,050 £675,000 £948,502
£448,551 £1,200,000 £1,713,426
£281,396 £853,000 £1,276,534
9% 7.5% 6% 4.5% 3% 1.5% 0% -1.5% -3% DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
NOV 2023
£400 £350 £300
£ 346
£ 342 £ 292
£ 286
£250
£ 243
£200 £150 £100 £50 £0 DETACHED
SEMI-DETACHED
TERRACED
FLAT/APARTMENT
ALL PROPERTY
68
66
64
62
62
60
57
56
55
55
55
55
55
57
59
52
52 48 44
45
40 36 NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEPT 2023
OCT 2023
NOV 2023
NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
NOV 2023
48 42 36 30 24 18 12 6 0
POWERED BY
2024-01-04