For many different reasons, estate agents notice a dip in interest in the property market on both the buyer and seller side, but what is unusual is that this has been far less pronounced in 2024.
The big reason for the traditional summer slump is that many buyers and sellers are focused on other priorities such as summer holidays, sporting events, and festivals. Buyers were, conventional wisdom suggests, willing to wait until Autumn before making any major plans.
However, whilst the summer of 2024 did see a slight dip in average house prices as recorded by Nationwide’s House Price Index, what is notable is that it was far less pronounced.
In fact, judged by annual change, it is the fastest rate of growth in the market year-on-year since December 2022, but unlike the latter part of that year, there is far more optimism for the property market and suggestions that a major market crash might not be on the horizon.
More Mortgage Approvals
To explore why there are so many green shoots of optimism, it is important to explore the last time so many home mortgages were approved, which according to the Bank of England was in September 2022.
That month has since become somewhat infamous amongst economists as part of a period of cascading crises for the United Kingdom, including one Prime Minister who lasted just 45 days, by far the shortest in the history of the United Kingdom.
What led to this short-lived political run, infamously compared to a head of lettuce, was a series of measures known as The Growth Plan, intended to, amongst other measures, prevent a housing market crash after the market peaked in the Summer.
The response was immediate and catastrophic; mortgage rates spiked from an average of under four per cent to well over six per cent, drastically reducing the buying power of many on the property market overnight.
As well as this, many banks and building societies withdrew their mortgage products entirely, making it far harder for buyers to get the money they needed to invest in the market at all.
House prices dropped for the first time in 15 months and it was the worst single-month fall in prices since June 2020, when many estate agents were unable to operate normally.
Whilst there have been rebounds since then, the forecast for the property market was not only far less optimistic but was also characterised by a belief that a major crash to rival the early 1990s market crash and the Great Recession starting in 2008.
As of the summer of 2024, that has yet to emerge, and much of the conversation surrounding the market has been far more positive.
Plans to build up to 1.5m houses have been greeted with cautious optimism, the Bank of England’s base interest rate has fallen for the first time since April 2020, when the rate reached 0.1 per cent, with expectations that it would fall again.
Other endeavours such as a change in mortgage approval criteria to allow some new buyers to get approved for loans up to 5.5 times their annual household income have also been welcomed.
