Property Market Update: April 2024

Welcome to the March edition of the Property Market Update! We've collated information from experts from across the UK to provide you with a comprehensive view of the current market.

This month, house prices fell according to two national indexes. The banks, Nationwide and Halifax, report that average house prices have fallen by -0.2% and -1%, despite growing by +1.6% and +0.3% annually (respectively).

Despite this slight dent in house prices, there are positive signs of improving market activity. Zoopla and Rightmove report that property sales increased by 9% and 13% year-on-year. Zoopla reports that there were 7% more sales over the first three months of 2024 compared to the same period in 2023.

There may be signs that housing affordability is beginning to move in the right direction, albeit slowly. Average weekly earnings have increased over the long-term, with £672 for average household total earnings in January 2024. As inflation has fallen over the past few months, we’re beginning to see growth rates increase year-on-year.

We investigate these signs in closer detail.

House prices wobble despite green shoots in 2024

Despite several months of growth, average house prices fell in March, with two major banks (Nationwide and Halifax) reporting dips of -0.2% and -1% respectively. Nationwide now reports that the average property is priced at £261,142, while Halifax reports that the average property is priced at £288,430.*

*Banks and building societies have different methods of collecting house price data, contributing to their alternate figures.

It’s true that growth isn’t everything. In today’s world, we often fall into the trap of believing that everything must be growing all the time to continue functioning. A dip, following months of positive spin, shouldn’t be alarming - in fact, when viewed against the backdrop of increased interest rates during this period, the resilience displayed by house prices is impressive.

Understanding that short-term changes are part of broader dynamics should offer a more balanced perspective of the market. These underlying signs of recovery, or ‘green shoots’, suggest that we're on still on a path towards stability.

Sales pick up year-on-year

Property portals, Zoopla and Rightmove, report that sales increased in March by 9% and 13% year-on-year. Zoopla continues by suggesting that there were 7% more sales over the first three months of 2024 compared to the same period in 2023.

Increased sales can be seen as a sign that consumer confidence is returning to the property market. There may be a number of reasons why homemovers are starting to make the leap…

1 - Housing stock has increased

Estate agents across the UK are reporting an extra 11% more properties on the market than last year. With more options available to homebuyers, it’s no surprise that sales are seeing a boost.

Unfortunately, an increase in stock can come with a number of set-backs. According to Zoopla, the average time to find a buyer is currently 71 days, the longest at this time of year since 2019. Attractively priced properties are being snapped up but over-optimistic sellers are taking longer to find a buyer.

Over 41% of sales agreed in March 2024 were at least 5% below asking price. It’s better to price your property right from the outset than adjust it half-way through a sale.

To make sure your property is marketed at the right price, you need a top-performing estate agent. Compare the best in your area today and request a valuation from the right experts.

2 - Wage growth has outpaced house prices

Average weekly earnings have been on the rise over the last few years, hitting £672 for average household total earnings this January. With inflation taking a dip in recent months, we're now witnessing year-on-year growth rates picking up steam.

This is good news for some aspiring homeowners, as it means that wages are increasing faster than house prices. With households having more buying power, the prospect of owning a place is becoming achievable for a smattering of would-be buyers, contributing to the increase in sales.

Unfortunately, while this is welcome news for a few buyers, it’s surface-deep for many. It’s expected that house prices will continue to inflate beyond this year’s wage increases. Until more homes are built, housing will remain a problem for the younger generations in this country. With UK rent forecasted to outpace wage growth for three years, there is little help to be seen for first-time buyers.

Thinking of selling? Click here to see your property’s real-time value here.

Mortgages rates rise again… should we be worried?

Mortgages have jumped up again according to financial information group, Moneyfacts. As of April 2024, average mortgage rates are, across all Loan-to-Values deals:

• 2-year fixed rate: 5.8%
• 5-year fixed rate: 5.39%

The Bank of England’s Monetary Policy Committee (MPC) has previously emphasised their intention to proceed with caution when considering lowering the base rate (currently 5.25%). Their stance reflects a commitment to ensuring that any risks of inflation have dissipated.

Suggestions of a potential rate adjustment during the summer imply a limited window of about four to five months for rates to dip below 5%. This likelihood is reinforced by the financial stability of banks and building societies, projected to maintain rates between 5-6% until 2025.

Although property transactions are increasing nation-wide, competition among lenders is driven more by necessity than by generosity.

However, things can change quickly. The number of mortgages approved for house purchases in January was 15% below pre-pandemic levels, indicating the challenges of higher rates. We may see lenders adjust them if mortgage approvals continue to fall.

Summary: Steady, as she goes

With little in the way of property-related announcements in the March Spring Budget, we’re all looking towards summer - for some sunshine and some news! Hopefully we’ll get a bit of both. Thanks for reading!