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How is the Housing Market shaping in 2024?

  • Feb 2nd 2024

As we venture into 2024, the housing market is showing signs of a gentle recovery, with an increase in buyer activity and a stabilisation of house prices.

Key Observations for 2024

The start of 2024 has witnessed a positive shift in the housing market dynamics, with a notable uplift in buyer demand and sales agreements. This shift brings a cautious optimism, yet underscores the importance of realistic pricing in an evolving market landscape.

Moderation in House Price Declines: The rapid declines observed in house prices are beginning to ease, indicating a move towards market stabilisation. Despite this, the overarching influence of higher mortgage rates persists, likely impacting house prices throughout 2024.

A Surge in Buyer Demand: The initial weeks of 2024 have seen a resurgence in buyer interest, particularly in London and the East of England, driving a rebound in market activity. This resurgence, however, is balanced by a demand still trailing behind the five-year average by 13%.

The Importance of Realistic Pricing: The alignment of buyer and seller expectations around pricing has contributed to an increase in sales agreements. With an overall supply up by 22% from last year, the market is becoming increasingly competitive, emphasising the need for sellers to price their properties attractively.

The Current State of House Prices

The slowing pace of house price falls is a key indicator of market recovery. By the end of 2023, the year-on-year price reduction had moderated to -0.8%, with the most significant declines observed in the East of England and the South West. This trend suggests a gradual move towards a more balanced market, albeit still influenced by the overarching economic climate and mortgage rate adjustments.

Market Projections for 2024

Continued Buyer's Market: The early 2024 rebound is promising but should be interpreted with caution. The market's recovery is likely to be gradual, with lower mortgage rates aiding sales volumes rather than significantly boosting house prices.

Challenges and Opportunities for Up Sizers: A significant portion of homeowners has yet to transition to higher mortgage rates, a factor that may influence the market, particularly for up sizers requiring larger mortgages. The emphasis on value-for-money will remain a critical consideration for buyers.

Pricing Strategy for Sellers: The increase in available properties offers buyers more options, leading to a competitive market for sellers. The necessity for sellers to adopt realistic pricing strategies is underscored by data showing that a notable percentage of sales are being agreed at more than 10% below the asking price.

Looking Ahead

As 2024 progresses, the housing market is expected to navigate through the complexities of economic influences and buyer-seller dynamics. For sellers, particularly, the emphasis on realistic pricing will be paramount in achieving successful sales in a market that continues to evolve.

In conclusion, whether you're looking to buy or sell, the importance of staying informed and working with knowledgeable professionals cannot be overstated. As the market continues to evolve, having a clear strategy and realistic expectations will be crucial for navigating the year ahead successfully.