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OnTheMarket Property Sentiment Index: What’s Happening to the UK Market?

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    Property Sentiment Index Breakdown: What Should Investors Watch Out For?

    According to property portal OnTheMarket, the housing market continues to intrigue and challenge buyers and sellers as we enter the busier part of the year.

    Their latest Property Sentiment Index analyses the current condition of the UK property market, closely examining specific regions.

    Let’s explore some key insights from the report and see how this will affect buy-to-let investments in 2024.

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      North-West Property Market Sees More Young Professionals & Increased Eco-Awareness

      One key aspect observed in April was that property prices remained at similar levels to the previous month, with the majority of increases generally seen in the best buy-to-let areas in the UK – such as the North West. The UK House Price Index reports that the average property price in the North West is £213,890, representing a 2.62% increase over the last 12 months.

      According to OnTheMarket, this was likely due to the growing demand from young professionals who wanted to live and work in major cities such as Liverpool.

      Another emerging trend in April was increased interest in energy efficiency and sustainable housing. Likely reflecting growing environmental awareness, eco-centric amenities and utilities have become a significant focus for tenants and investors alike.

      For example, The Gateway in Liverpool will generate its own electricity, reducing utility bills through energy-saving technology (such as solar panels and air source heat pumps). This will result in a low service charge for investors while also appealing to this growing population of eco-conscious tenants.

      Further Reading: Learn about the direct costs of a buy-to-let property with our updated market insights!

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        North East Property Market Experiences ‘Slowdown’ in New Listings

        According to John Nicholson, Managing Director of Dowen Auction, Sales and Lettings, the North East market was in a “delicate equilibrium” in April, which saw a slowdown in market activity.

        His analysis suggests that speculation surrounding interest rates caused some buyers to adopt a “wait-and-see approach”, anticipating more potentially favourable conditions later on.

        However, the most apparent trend was the continued imbalance between supply and demand.

        Across the board, the UK has seen a persistent shortage of available properties for some time. This scarcity and growing demand have created a competitive environment where properties can typically see more offers and sell more quickly.

        Overall, OnTheMarket and Nicholson conclude that April’s North East housing market represented a balance between cautious optimism and steady demand.

        While speculation surrounding interest rate cuts prompted some buyers to remain cautious, the supply/demand property imbalance and continued buyer interest ensured that the market remained resilient.

        Learn More: Our dedicated starter investment guides will help you discover where to invest in 2024 and how to calculate market value!

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        Wales & the West Midlands Markets See Increased Activity

        The report indicates promising activity in Wales, particularly towards the lower end.

        According to Melfyn Williams, Director of Anglesey & Gwynedd, homes in this bracket keep the market “vibrant and buoyant”. They also expect confidence to return to the higher end of the market as summer approaches and it reaches the seasonally active time of year.

        The West Midlands, particularly in Staffordshire, also exhibited notable trends, with buyer demand and property prices seeing significant activity.

        The report attributes this increased attention to affordable housing options compared to other parts of the UK. For example, Staffordshire reported a steady increase in property prices in April, with an average growth of 2.5% compared to the previous month.

        According to Angi Cooney, Director of C Residential, this is likely attributed to heightened demand for residential property driven by first-time buyers and those looking for family homes.

        Increased regeneration projects and the introduction of new-build properties in the area have also enhanced its appeal, with homes in areas such as Lichfield and Stafford selling rapidly and often above the asking price.

        Read More: For more information, take a look at the RWinvest Welsh stamp duty calculator or our guide to new-builds in Swansea.

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          What’s the Overall State of the UK Property Market?

          OnTheMarket’s Property Sentiment Index suggests that buyer and seller confidence has shifted to a “level playing field” over the last few months.

          In October 2023, 72% of buyers stated they were confident they’d buy within three months, compared with 58% of sellers confident they’d sell within the same timeframe.

          Since then, as of April 2024, 64% of active buyers in the UK were confident that they would purchase a property within the next three months, while the equivalent figure for sellers is 61%.

          Jason Tebb, president of OnTheMarket, said: “There’s been a rebalancing from what was a bullish buyer’s market in the latter part of last year to a more level playing field. Buyers appear less certain of the strength of their position, which may have something to do with the uncertainty that continues to prevail – not just with interest rates, inflation and when an election will be called in the UK – but also wider international concerns.”

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          Reece Pape

          Reece Pape is a property writer at RWinvest. Utilising up-to-date property statistics and data, Reece aims to keep investors informed on the latest market developments.