A halt in interest rate rises, lower mortgage interest rates and rising house prices have contributed to an increase in positive sentiment across home buyers.
A third of people recently surveyed think house prices will rise over the next 12 months, up from 1 in 5 just 3 months ago according to the latest Property Tracker report from the Building Societies Association (BSA). Despite a similar jump amongst those who feel that house prices will fall (1 in 4 (24%) believing this to be the case, compared to 39% in September) the net effect is an overall positive view that house prices will rise for the first time since September 2022.
Market sentiment
Property portal Rightmove have started to crunch the numbers on 2023, identifying that the property market “more resilient than many predicted as it continued its slow transition from frenzy to more normality.” It points to the year to date sales agreed figure, just 13% below the same time last year, as an indicator that sentiment remains stable. And suggests that buyer demand is up 6% after some movers paused to wait for calmer conditions.
Indeed the BSA Property Tracker suggests the proportion of people who think now is a good time to buy a property has remained around the same as it has been throughout 2023, around 16%.
Tim Bannister Rightmove’s Director of Property Science comments
“High mortgage rates which have added to already-stretched buyer affordability have been a challenge throughout 2023 and this is
likely to carry into next year. However for now, there appears to be more calm and certainty heading into 2024… with mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year. Indeed, there’s always a big post-Christmas upturn in Rightmove traffic, with early bird-buyers starting their search on Boxing Day.”
Mortgages will remain a barrier to affordability, there are signs in the BSA survey that there is a wider acceptance of higher mortgage rates; the proportion of people who said mortgage affordability was a barrier to home ownership has fallen to 68% in December, from 71% in September. And 85% of those survey with mortgages are “confident” about keeping up with their monthly mortgage payments, a figure which remains largely unchanged over the last 12 months.
Interestingly, job security is beginning to play on people’s minds with a small increase over the last 6 months.
