The UK housing market has been particularly volatile over the last few years. In 2022, house prices soared into the stratosphere. The rush of people willing to buy and sell caused quite a stir. Then, inevitably, everything cooled off. House prices dipped and people stopped submitting for mortgages in such high volumes. There was also the much-maligned, market-scaring “mini-budget” and the ripple effects that it caused.
As the housing market is used as a measure of national economic health, its rather slow rate of recovery has been of particular interest to economists. Perhaps with the sudden rush of price increases, a slower recovery after bottoming out in 2023 was to be expected. In any case, there are now promising signs. Looking at key indicators, it appears as though the market’s getting ready to heat up. Many key conditions are certainly in place to do so.
A return to growth is hinted at over the next year
On 11 April, a new snapshot from the Royal Institution of Chartered Surveyors was showcased. It demonstrated that property prices stabilised in March. This is according to the report from The Guardian. As a result, house prices are tipped to return to growth. The growth is expected to be seen over the next 12 months. Helping this growth is inflation’s decline. Plus, buyer demand continued to rise.
The UK House Price Index did signal a 0.6 per cent decrease in its recent report. Looking at January 2023 to January 2024, there was this dip. However, from December 2023 to January 2024, house prices averaged a 1.1 per cent uptick. The market tends to see more action in the spring months. March is usually hailed as the best time to sell, for example. So, strong March figures could hint at momentum continuing.
In the first three months of 2024, demand for mortgages went up. This aligns with March being a top month for the housing market. On the index from the Bank of England, there was a positive 35.9 increase on the index. This is when comparing firms reporting less demand versus more demand for home loans. It’s another key indicator of confidence in the market returning.
Other conditions worth noting for market recovery
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Credit: Valentina Locatelli on Unsplash.
What may play an underlying role in the gradual housing market recovery are the new options for buyers. Recently, more online real estate agents have risen to the fore. Ready to be competitive as a UK operator, some even offer no hidden fees and free cash offers within minutes. Online estate agent We Buy Any Home uses these as key selling points. They also give users the chance to guarantee a sale at a time that suits them.
It makes for a very user-friendly entry point to the market. The idea of selling quickly or at the customer’s own pace is also appealing to many. Those who want a quick sale can even look to that near-instant offer. On top of this, property shortages and rampaging second homeowners and landlords ensure high prices. Then, there’s the decrease in the UK Inflation Rate. It’s now down to 3.4 per cent from 10.40 per cent the year prior.
So, there are indicators that the UK’s housing market is on the up.