UK Housing Market Shows Resilient Start in 2024
The UK housing market is off to a robust start in 2024, despite earlier predictions of a downturn. Rightmove reports that asking prices have surged by 1.3% in January, averaging at £359,748. This increase not only exceeds the long-term January average of 0.6%, it marks the strongest beginning to a year since 2020.
The market has shown impressive resilience in the face of stagnate asking prices over the past year, minimizing price drops to only 0.7%. Despite slowing transactions, the anticipated 10% or more drop in prices has not materialized.
Contributing to the market's strength are factors such as a price war in the mortgage market, driving down interest rates for borrowers. The Bank of England's potential rate cuts, expected as soon as May, further fuel optimism among buyers. Markets currently lean towards a total of five quarter-point cuts by the end of 2024.
The first week of the year saw buyer demand increase by 5% compared to 2023, while the amount of new properties in the market is 15% higher than this time last year.
Furthermore, lenders reducing mortgage margins have caused the average five-year mortgage rate to reduce to 4.86%.
Knight Frank's positive forecast adds to the optimism, predicting a 3% rise in house values throughout the year. The real estate consultancy anticipates low-level single-digit growth in subsequent years, projecting a cumulative growth of 20.5% in the five years leading to 2028. Overall, the UK housing market seems poised for a more positive trajectory in 2024.
Sources:
Sky News
The Business Times
https://www.businesstimes.com.sg/property/uk-housing-market-heats-strong-jump-asking-prices
