As the UK property market navigates through the spring season, leading indicators are showing promising signs of recovery.
Nicky Stevenson, Managing Director of Fine & Country, points to upward trends in mortgage approvals and sales volumes, signalling an optimistic trajectory for the sector.
Highlighting the encouraging data, Stevenson says: “With inflation dipping to just 3.2% in the year to March, coupled with speculation of an imminent base rate reduction, we are witnessing improved market confidence. With the economic outlook improving alongside the usual spring optimism, almost two-thirds of agents polled by Dataloft say that buyer confidence has improved compared to three months ago.”
According to the Bank of England, mortgage approvals reached 61,325 in March, the highest level since September 2022, and a 20% increase year-on-year. Transaction activity, albeit still below last year's levels, is on a steady incline, with HMRC data showing a third consecutive monthly rise in sales, reaching 84,200 in March. Zoopla reports that the market is on track for 1.1 million sales in 2024, up 10% on last year.
Stevenson comments: "Signs of a gradual recovery are increasingly evident, with Rightmove reporting a 1.1% increase in the average asking price to £372,324 in April, and the annual rate of price growth is now +1.7%, the highest level for 12 months. Lloyds Bank has revised its UK house price forecast, anticipating a 1.5% increase in 2024, a notable shift from the previously expected decrease of 2.2%."
Buyers are benefiting from an expanded inventory, with the supply of homes for sale reaching a five-year high. With 20% more homes on the market versus the same time last year, prospective buyers have a lot more options available, although affordability remains a key factor affecting budgets.
Stevenson adds: "The surge in supply, particularly of larger properties, is promising for families seeking to upsize. However, sellers should be mindful of setting realistic prices to ensure successful transactions."
Stevenson notes that as we move into the warmer months, the average time to sell is decreasing. The average property took 64 days to sell in March, the lowest level since October 2023 and significantly quicker than 78 days in January. Terraced houses are the property type selling the quickest across the UK, at an average of just 56 days, followed closely by semi-detached houses at 58 days.
Turning her attention to the prime market, Stevenson says that the average price of a property at the upper end of the market is £1,254,411, slightly down by 1.9% from a year ago.
She concludes: “The East Midlands and Yorkshire and the Humber are showing positive annual growth, at 0.6% and 0.2% respectively. There is a strong presence of cash buyers who continue to play a significant role in the prime market. According to the UK HPI, 35% of sales in Great Britain are currently cash, compared to 30% the same month the year before."