The first quarter of 2024 has been a rather unusual time for estate agents, as the housing market has not only held firm in the face of circumstances that would reasonably have seen a marked decline in house prices but has seen some renewed optimism.
Several regular house price indexes, most notably Rightmove’s, have showcased a demonstrable increase in buyer demand, average asking price and agreed number of sales.
Halifax noted, as reported by The Guardian, that the average house price in the UK is less than £2000 away from the peak of the housing surge in June 2022.
When prices began to fall, many predictions for the market were that at some point there would be a market correction, as with many cost of living pressures taking hold, increased interest rates and reduced affordability, demand would inherently drop.
This has not happened, for the most part, with 2023 seeing a modest fall and 2024 seeing a surge in the market again, despite a lack of the types of incentives that catalysed the housing surge in the first place.
This all begs the question of why house prices have defied the odds like this.
Part of it is a surge of demand that came, ironically, after the relatively limited Spring Budget offering; without a major policy or saving to wait for, people who are in a position to buy are sending their offers now.
After two years of constant interest rate increases by the Bank of England, the Bank Rate has kept steady at 5.25 per cent and inflation has slowed, allowing enough stability for mortgage lenders to start to compete with each other and lower the average rates, although they remain somewhat volatile.
The market’s demand has also been driven primarily at the higher end of the market as London buyers and people looking for larger houses at the upper end of the ladder are driving a lot of the demand.
It remains to be seen what will happen next in an unpredictable market, but it will likely continue to surprise.
