A cautiously positive outlook on the future of the property market is tempered by the current shortfall in sales as we head in to 2024 according to the latest Royal Institute of Chartered Surveyors Residential Survey. The report points to the stabilising effect of holding interest rates on the mortgage market and the impact on affordability confidence and demand.
“The latest RICS Residential Market Survey provides further evidence that sentiment is a little less negative than previously was the case with, critically, the new buyers enquiries indicator finally beginning to stabilise. This is being aided by increased confidence that the interest rate cycle has peaked which is reflected in somewhat more competitive mortgage products coming to the market.
“However, with the cost of money likely to remain elevated for some time to come and the economic outlook still downbeat, it is not surprising that the overall tone to the anecdotal remarks from survey respondents is still quite cautious.”
says RICS Chief Economist, Simon Rubinsohn.
Although new buyer enquiries are still well below levels through the 2010’s they are rising from steadily from a near all time low in 2022 and have for the first time since then reached a level more in line with 2018/19. While this signals buyer demand is still falling, the -14% net balance figure is the least negative figure since April 2022.
For agreed sales on a national level, the net balance of -11% represents an improvement on the -23% in October and suggests the downward trend in sales volumes is easing, and in some regions (East Anglia, the North West, and Northern Ireland) there are positive figures with sales exceeding previous months. Meanwhile, the average time taken to finalise a sale (from initial listing to completion) now sits at 19 weeks, a small reduction from 20 weeks in September.
Meanwhile property portal Rightmove has hinted that January and February could be positive months for home movers coming to market with a bumper number of properties anticipated being listed on the portal. Boxing Day is traditionally one of the busiest days of the year for the property portal and figures released this week show that the number of properties listed by estate agents on Boxing Day last year was 46% higher than in 2021, and 173% higher than 2019.
Rightmove’s property expert Tim Bannister said:
“We typically see a post-Christmas upturn in buyer activity, with early-bird buyers finishing off their turkey dinners and starting their search for a new home for the new year. It’s a key reason why we’re seeing more new sellers come to market on Boxing Day, ready for their properties to be the first seen by prospective new buyers. However, with activity typically increasing from Boxing Day into January, sellers planning to come to market later in January still have time to capitalise on the renewed buyer activity.
“This year’s upturn will be eagerly anticipated by those who are keen to sell, who may have been holding off due to the disorderly mortgage market earlier this year. Many will also be watching the scale of the upturn as an early sign of building momentum as we progress through the winter and into the important spring selling season and year ahead.”
The sentiment chimes with the RICS report which suggests that near term (Q1 2024) sales expectations provide the first positive reading since early 2022 (+6) with respondents seemingly bullish about 2024. A positive 24% net balance suggests confidence may be returning to both home movers, and the wider home moving profession.
