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Momentum builds

Momentum builds in housing market but price sensitivity remains

The housing market is showing growth in seller and buyer activity, reports Rightmove this week, while its analysis shows those who price competitively initially are far more likely to sell quickly.

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Originally posted: 20th February, 2024

Growth in seller and buyer activity

The housing market is showing growth in seller and buyer activity, reports Rightmove this week, while its analysis shows those who price competitively initially are far more likely to sell quickly.

In contrast, the analysis shows that over-priced properties are left on the shelf.

February’s House Price Index from Rightmove shows that average new seller asking prices are up by 0.9% (+£3,091) this month to £362,839. The annual price change moves tentatively into positive territory after six months of annual price drops, with prices up by 0.1% over a year ago.

Sales agreed in the first six weeks of this year are 16% up on the same period last year, and 3% up on the more normal market of 2019, illustrating that many early-bird buyers feel that 2024 presents the right conditions to move.

Increase of activity

The growing momentum in the market is shown by the increase of activity of both buyers and sellers on Rightmove with 7% more new listings coming to the market over last year, and a 7% increase in the number of buyers enquiring.

Rightmove reports that it’s taking over two weeks longer to find a buyer than at this time last year, with the average time to sell at its slowest since 2015; this does not include the initial pandemic lockdown months of April and May 2020.

Rightmove’s report says that with the 2024 Budget coming up, more support to assist first-time onto the property ladder would be welcome, with activity levels dropping behind in this sector as mortgage rates remain elevated and saving for a deposit still proving challenging.

“2024 offers the right market conditions to move”

Tim Bannister, Rightmove’s Director of Property Science, commented: “We said that February would be an important indicator for the year ahead, and the question was whether the Rightmove Boxing Day bounce in buyer activity would keep its spring into March or lose momentum. It’s proved to be the former, with the number of sales agreed continuing to considerably outstrip last year. Early-bird Boxing Day buyers got a head start in cherry picking from a record level of new property choice and have now been joined by many other buyers also believing that 2024 offers the right market conditions to move. Mortgage rates have fallen considerably from their peak and are now remaining broadly stable after the uncertainty of late 2022 and 2023. Momentum to move in 2024 is continuing to build, but prospective sellers mustn’t get carried away. Buyers now have more choice of property for sale and many are still very price-sensitive, with mortgage rates remaining elevated. Sellers who are serious about moving this year would be well-advised to ride this wave of increased buyer confidence with an attractive asking price before any pre-election jitters or unexpected events dampen the momentum.”

He added: “There continue to be reasons for cautious optimism as we settle into 2024, with encouraging activity levels and a more stable housing market. While some would-be buyers will continue to be affected by elevated mortgage rates and major affordability constraints, many other prospective buyers who can afford to do so, have acted fast and demonstrated their belief that 2024 is their year to get moving. It is still early days for 2024, with a Budget, General Election and no doubt more global events still to play out. With the Budget up next, the government will be considering a range of options to support movers and we expect to hear more policy rumours as the date approaches. Rightmove’s whole-of-market data shows that it’s the first-time-buyer segment who could use the most support this spring, and well-thought-out initiatives to help to get more would-be first-time buyers onto the ladder would be welcome.”

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