The UK housing market is facing challenges as it tries to pick up momentum in the wake of a significant drop in sales last year. Factors like higher borrowing costs and political uncertainty are putting the brakes on transactions, making it a tough time for the sector to fully recover. Despite this, there are some positive forecasts that show a potential increase in home sales for the upcoming year. Here are some key insights into the current state of the UK housing market:
- Forecasts suggest that UK homes sales are set to rise this year, although they are expected to remain below the long-term pre-pandemic average of 1.2 million transactions annually.
- Leading property experts like Savills, Hamptons, and Zoopla predict varying numbers of home sales for 2024, with estimates ranging from 1.04 million to 1.1 million.
- The decrease in mortgage rates is playing a crucial role in boosting buyer confidence and influencing purchasing decisions in the market.
- The Bank of England has taken steps to lower the benchmark interest rate to 4.75 per cent, following a previous reduction, which is expected to positively impact the housing market.
- However, despite the decrease in mortgage costs, there has been a plateau in fixed-rate deals, with some rates even showing a slight increase in recent weeks.
- The number of home sales not only reflects confidence in the housing market but also influences the supply of new homes from commercial housebuilders, which is vital given the current supply shortages.
- Sales in high-priced markets like London, the south-east, and eastern England have seen a significant decline compared to pre-pandemic levels.
- House prices have remained relatively stable, with nominal values hovering around their peak from 2022, despite a slight decrease in real terms.
- Experts predict a moderate increase in house prices by the end of 2024, with Savills forecasting a 3 per cent gain and Zoopla projecting a 2 per cent rise.
- The dynamics of renting versus buying have shifted due to rapid rent growth and declining mortgage rates, making it more favorable for first-time buyers to enter the market.
- First-time buyers are expected to make up a substantial portion of buyers, with data showing that buying is more cost-effective than renting for many in the current market.
- The government’s decision to end temporary tax breaks on stamp duty in April could lead to a slight uptick in transactions, particularly for first-time buyers who stand to benefit from potential savings.
- Despite some positive indicators and the easing of political uncertainties, the speed of market recovery will largely depend on borrowing costs and the overall economic climate.
In conclusion, the UK housing market is poised for some positive developments in the coming year, but challenges still remain. Keeping an eye on key factors like mortgage rates, political stability, and buyer confidence will be crucial in determining the market’s trajectory moving forward. As the market gradually recovers, it’s essential for both buyers and sellers to stay informed and prepared for the opportunities and challenges that lie ahead.
Leave feedback about this