February is typically an important month for the property market, and not least because it affords an insight into some of the key markers for industry health - January's performance indices!
As well, February is widely considered to be a pacesetter for buyer and seller behaviour, and is statistically the time when properties stand the highest chance of selling success (the average time it takes to find a buyer being 51 days – less than the average for even the peak spring selling season.)
With Halifax indicating last week that average house prices rose in January by 1.3% (£3,924 in cash terms), industry experts are beginning to feel cautiously optimistic about an ongoing - albeit modest - upward trajectory for prices as we head into the spring.
These predictions come as the pace of annual house price growth hits +2.5% - the highest rate since January last year. It is thought that with more interest rate cuts to come, house prices should continue to strengthen in the year ahead, and especially if the labour market remains resilient, wage growth continues and stock levels continue to be outstripped by demand.
This will also depend, most likely, on whether the downward pressure on mortgage rates continues, since this will inevitably play a crucial role in restoring buying power – a key pillar of market recovery.
Summary
Of course, nobody can predict with absolute certainty how 2024 will play out for the property market, especially given the dual headwinds of interest rates and inflation. In addition, there remains a wide margin for economic turbulence owing to the various nuances of world unrest.
Saying that, three consecutive interest rate holds have made some headway in terms of rebuilding buyer and seller confidence. Also, increasing competition between lenders (resulting in an uptick of attractive mortgage products) and talk of further rate cuts in May/June is helping paint a picture of reasonable positivity, where transactions will with-any-luck continue rising from last year’s low base.
By recent standards, the 4.5% to 5% range does undeniably look daunting. However, potential home-movers should keep in mind how these average rates sit in long run standards.
With this in mind, a bigger picture perspective is strongly recommended when buying in today's market. For sellers, the much-changed economic landscape makes it all the more important that homes are priced attractively against other similar properties, and that a targeted, dynamic approach to marketing is adopted as standard.
For more information on the current market, please contact Braxton at property@braxtons.co.uk or call 01628 674234.