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Property Market ‘Turns Page’ With Huge Activity Boost

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    Huge Increase in Activity Promises a Stronger 2024 for UK Housing

    Hamptons claims the housing market is changing positively, citing fewer price reductions and higher achieved prices.

    This sharply contrasts with the doom and gloom throughout most of 2023. It also joins a growing number of forecasts for a more productive housing market in 2024 – Knight Frank predicts a 3% rise in property valuations over the next 12 months.

    Let’s look at Hampton’s outlook in more detail.

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      How Is Activity in the UK Property Market?

      According to the Hamptons January market activity update, falling mortgage rates fueled increased demand. Last month, more households sought to buy than in any January over the past decade, surpassing both 2021 and 2022.

      Hamptons reported a decrease in homes with price reductions, from 55% in October 2023 to 48% across England & Wales in January. This marks the first time since June 2023 that less than half of homes sold after a reduction, indicating competitive pricing among sellers.

      On average, homes were on the market for 80 days before a price drop, reflecting sellers’ adjustments to market shifts in 2023. However, 27% of these homes sold above their final asking price, the highest since October 2022.

      Properties in the £250,000 to £500,000 range saw the most significant price reduction. Hamptons attributed this to first-time buyers and second-steppers returning due to lower mortgage rates.

      The average seller in England & Wales achieved 98.9% of their asking price last month, up from 98.5% in December 2023 and January 2023.

      First-time buyers and movers led the charge, while buyers of buy-to-lets and second homes remained price-sensitive. This is typical of the buy-to-let market, with investors keen to find good-value properties with high-yield potential. For that reason, investors often look to areas like the North West, where buy-to-let properties are considerably cheaper than the national average while rent yields remain attractive.

      Regionally, the East of England saw the most significant annual improvement, with sellers achieving 98.8% of their asking price, up 1.2% from January 2023. In contrast, Yorkshire & The Humber sellers continued to sell at a more significant discount than the previous year.

      With more buyers, new homes are selling faster, with 9% sold within a week in January, up from 6% in January 2023. However, this remains lower than January 2021, when 19% of homes sold within a week.

      The average home sold last month had been on the market for 92 days, the slowest January in a decade. This is primarily due to homes on the market for some time finally selling in January, according to Hamptons.

      The analysis revealed that 86% of homes sold last month were listed before the New Year, compared to 78% in January 2019.

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      How Did Hamptons React to Increased Activity in the UK Property Market?

      Head of research at Hamptons, Aneisha Beveridge, said:

      “The early signs in 2024 suggest that the market has firmly turned the page. Falling mortgage rates have been the primary catalyst, tempting last year’s missing movers to restart their property search. Consequently, more households were looking to buy last month than in any January over the last decade, including the start of both 2021 and 2022.

      “First-time buyers and second steppers, who tend to be most reliant on mortgage finance, are at the forefront of the recovery. This injection of demand is starting to stabilise house price falls, particularly for mid to lower-priced homes, which should also improve selling conditions further up the chain as the year progresses. That said, the affordability picture is still more challenging than it was a few years ago, which will keep a tight lid on price growth.”

      Learn more about property investment with our recent buy-to-let area guides:

      Property Market Turns Page With Huge Activity Boost

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      Dale Barham

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      Dale is a property news and onsite content writer at RWinvest.