DECEMBER 2023
£835,000
£1,253,927
-1.4%
£674
£39.1bn
16,951
MORTGAGE APPROVALS (OCT)
47,383
-11.3%
-17.1%
RESIDENTIAL TRANSACTIONS (OCT)
82,910
0.6%
-20.5%
GROSS MORTGAGE LENDING (OCT)
£16.2bn
-6.6%
-40.3%
60,988
2.8%
-5.7%
244,830
-
-4.3%
NEW HOMES BUILT (Q323) NEW HOMES BUILT (ANNUAL)
IMPROVING CONFIDENCE
The housing market has displayed remarkable resilience against the economic headwinds of 2023, with prices holding up better than expected. As inflation falls and the outlook improves, demand is rising. ROUND UP The economic and political landscape is recalibrating after the turmoil at the end of last year, but inflation has been a persistent challenge throughout 2023. However, the final few months of the year saw inflation rapidly dropping, having more than halved since the start of the year (ONS). Interest rates have been held at 5.25% for the fourth Bank of England meeting in a row and are forecast to fall to 4.7% by the end of 2024 (HM Treasury Consensus Forecast November 2023). The economy continues to grow, with high wage growth and strong employment levels. Amid these positive developments, consumer confidence surged in November, rising by six points to -24, improving across all metrics (GfK Consumer Confidence Tracker). The average house price has held steady over the course of the year, currently at £291,385, which is 1.8% higher than the average price in January and 25% above 2019 pre-Covid levels (ONS, UK HPI September). The Nationwide Index showed positive monthly growth for a third straight month, reaching 0.2% in November, as well as the first positive quarterly growth since October last year.
BUYERS RETURNING The number of mortgage approvals showed an unexpected uptick of 8% between September and October, an 18% improvement on the start of the year (Bank of England). Buyers are slowly returning to the market now that interest rates are widely thought to have peaked. Zoopla has reported a 15% rise in the volume of new sales being agreed compared to the same time last year, and a 5% increase on 2019 levels, as sellers become more realistic and accept discounts to
asking prices. Although sellers don’t like to reduce prices, those who are also buying will benefit from these on the property they are purchasing. Sales volumes are holding steady, showing positive quarterly growth of +0.6% (HMRC), demonstrating the resilience of the property market. Demand has been supported by motivated buyers, with over one in five (21%) of moves being needs-based (Dataloft, Property Academy Home Moving Trends 2023).
MORTGAGE METRICS Fixed mortgage rates are continuing to fall back from their summer peak, with the average five-year fix at 5.68% and two-year at 6.08%, having dropped from 6.17% and 6.67% respectively since the start of September (Moneyfacts). While rates are unlikely to return to the lows experienced in the pandemic, there is a growing acceptance of the new landscape. The easing back of borrowing costs, together with strong income growth, should underpin an increase in activity in 2024.
PRIME MARKETS The average price of a property in the prime market is £1,253,927, slightly down by 1.4% on a year ago. Activity in the prime market has proved resilient throughout 2023, being more sheltered from the wider economic climate due to its higher levels of cash purchases. As we approach the festive season, people are looking to move into their new homes quickly with minimum hassle. More than three in five agents surveyed said that ‘turnkey’ were the most sought-after homes to buy. A further 26% responded ‘in need of refurbishment’ as the most in demand properties, and just 12% said ‘fixer-uppers’ (Dataloft Poll of Subscribers).
£406,000 £549,144 -1.8% £291
£519,000 £721,666 +2.5% £373
£587,000 £780,840 +1.6% £390
£531,000 £698,889 +1.6% £345
£485,000 £631,584 -0.2% £335
£770,000 £1,052,412 -1.6% £505
£508,000 £690,536 +2.2% £355
£830,000 £1,141,246 +0.6% £545 £999,000 £1,449,927 0% £607
£1,680,000 £2,776,732 -4% £1,327
12% 10% 8% 6% 4% 2% 0% -2% -4% NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
£1,200 £1,050
£ 1,095
£900 £750 £600
£ 750 £ 633
£450
£ 674 £ 592
£300 £150 £0 DETACHED
SEMI-DETACHED
TERRACED
FLAT/APARTMENT
ALL PROPERTY
0% -5% -10% -15% -20% -25% -30% -35% -40% OCT 2022
NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
£270,908 £835,000 £1,253,927
£224,021 £734,000 £1,175,521
£214,958 £679,000 £1,069,464
£269,218 £677,000 £950,795
£450,127 £1,200,000 £1,715,643
£282,657 £851,000 £1,273,732
8.4% 7.2% 6% 4.8% 3.6% 2.4% 1.2% 0% -1.2% NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
£400 £350 £300
£ 347
£ 344 £ 293
£ 287
£250
£ 244
£200 £150 £100 £50 £0 DETACHED
SEMI-DETACHED
TERRACED
FLAT/APARTMENT
ALL PROPERTY
64
62
60
57
56
55
55
55
55
55
57
59
62
52
52 48
45
44 40
40
36 32 OCT 2022
NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEPT 2023
OCT 2023
OCT 2022
NOV 2022
DEC 2022
JAN 2023
FEB 2023
MAR 2023
APR 2023
MAY 2023
JUN 2023
JUL 2023
AUG 2023
SEP 2023
OCT 2023
40 35 30 25 20 15 10 5 0
2023-12-01