Spring Brings Surge in Property Market Optimism

As the property market transitions into spring, a sense of cautious optimism pervades among industry insiders and homeowners, as noted by Nicky Stevenson, Managing Director of Fine & Country.

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Encouraging Market Trends

Stevenson highlights recent statistics from Rightmove, indicating a 0.9% rise in the average new seller asking price from January to February. This uptick, along with a 0.1% year-on-year increase in average prices, suggests a promising shift in market confidence after a period of annual declines since August 2023.

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Revised Forecasts and Market Resilience

In response to these developments, Lloyds Banking Group has adjusted its house price forecasts, projecting a softer price moderation of -2.2% with potential for positive growth next year. These revisions reflect a more optimistic outlook for the housing market, buoyed by increased resilience against higher mortgage rates than previously anticipated.

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Mortgage Market Dynamics

In parallel, Moneyfacts reports a six-month consecutive decrease in average rates for both two-year and five-year fixed-rate mortgages. With rates falling below 5%, and even 4% offered by several lenders, the mortgage market exhibits stability and accessibility, potentially stimulating further growth in property purchases.

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Rising Transaction Activity

HMRC data reveals a 1.9% increase in transactions from December to January, marking the first monthly rise since August 2023. Agreed sales, according to Rightmove, are notably higher than the same period last year, suggesting pent-up demand and a resurgence of buyers previously delaying moves.

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Growing Momentum and Market Confidence

The surge in mortgage approvals, reaching heights unseen since October 2022, coupled with a 7.2% rise in transactions between December and January, underscores the increasing momentum as the housing market enters spring. Zoopla's report of a 21% year-on-year increase in homes for sale further supports this trend, indicating heightened confidence among vendors and expanded options for buyers.

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A Balanced Outlook

Summarising the data, Stevenson points towards a more balanced and active property market, driven by rising buyer demand, improved supply levels, and favourable mortgage rates. While cautiously optimistic about the year ahead, she emphasises the importance of realistic pricing to ensure successful transactions amidst evolving market conditions.

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Looking Ahead

According to Zoopla's projections, the market is poised for a 10% increase in sales in 2024 compared to 2023, signalling a robust year for the property sector. However, maintaining realistic pricing remains crucial amid this evolving landscape.

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