Property Market Update – January 2024

UK Housing Market Update –  January 2024

Introduction

The UK housing market has seen much fluctuation over the past couple of years. With mortgage rates rising and affordability decreasing, there is still uncertainty around house prices and sales. This article will summarise the current state of the market and offer advice for buyers and sellers.

Conflicting House Price Data

There have been contradictory reports on house price changes from different sources. Rightmove has indicated prices are rising, while lenders suggest they are stable or increasing slightly. However, Land Registry data shows more significant declines of 2-3%.

Rightmove’s asking prices do not reflect actual sold prices. Lenders’ data only covers mortgaged properties, missing cash buyers. Land Registry lags by up to 12 months. Overall, this allows estate agents to mislead buyers about true market values.

Buyer Affordability Down 75%

Despite some improved mortgage deals, buyer affordability has dropped approximately 75% compared to 2 years ago. This is putting downward pressure on prices as fewer can afford to buy.

First-time buyers should be cautious, even though the market is less dangerous than 6 months ago. Incentives on new builds can disguise true prices. Any incentives should be disclosed to the Land Registry to avoid deception.

Seller Advice

Homeowners with expiring fixed rate deals are often unable to remortgage affordably due to stress testing. Landlords face even tougher conditions, with buy-to-let rates spiking over 9%.

Sellers should price realistically based on local demand. Seek valuations from independent surveyors who can give honest opinions without developer pressure. Be prepared to accept lower offers in the current climate.

Market Outlook

While pockets of price growth may occur, the overall trajectory is down until affordability improves. Cities like Cambridge may be more resilient due to limited space for building.

The market remains challenging. Buyers and sellers should tread carefully, verify information and make decisions based on affordability rather than hype. With caution, there are still opportunities in the turbulent housing market.