2023 UK Property Sales Better Than Initial Forecasts
With another month comes another Rightmove House Price Index. As the final HPI of the year from the UK’s most popular property website, the data reflected on the entirety of 2023, revealing a much healthier housing market than many predicted at the end of 2022 – good news for property investors looking for a buy-to-let for sale.
Let’s look at the data in more detail.
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Sales Much Higher Than Predicted for the UK Property
One of the most surprising figures was the number of sales agreed in 2023. There were only 13% fewer property sales than in 2022 compared to last year. While a decline may not seem like good news, you need to consider the damage done to the GBP following Kwasi Kwarteng’s horrendous mini-budget in October 2022, which sent inflation skyrocketing.
As a result, the Bank of England raised the interest rate to 5.25%, the knock-on effect of which was considerable increases in mortgage rates. Many thought this would lead to a massive decrease in buyer activity.
While buyer activity has declined, it is only 13% below 2022 levels, which is a testament to the staying power of the UK property scene – consistently one of the more low-risk investments in the UK – especially considering the significant uplift in activity in the post-pandemic market.
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Will Buyer Activity Increase in 2024?
It is too early to say whether buyer activity will improve in 2024. However, the mortgage rate decline over the last few months may shine a light on potential buyer activity over the next year.
According to the Rightmove HPI, the average 5-year fixed rate is 5.11% after falling for 19 weeks. Rightmove suggests that family movers may become more active as they look for homes with more space. Demand for three and four-bed homes has increased in the second-stepper mid-market sector. Demand is up by 9% for these types of homes compared to the final few months of 2022.
With the mortgage market developing renewed confidence in UK property and growing signs that the Bank of England’s Base Rate has reached its zenith, expect more investors looking for buy-to-let property and apartments to enter the market despite mortgages being higher than pre-pandemic levels. So how does buy to let work? find out more in our free property investment guide.
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Asking Prices Fall By 1.1% Year-on-Year
Many experts have considered declining asking prices as a side effect of this year’s decreased buyer activity.
Over the last 12 months, sellers have reduced their average asking prices by 1.1% to tempt buyers to purchase.
However, recent data has shown that new seller asking prices are higher in 63% of areas in Great Britain.
Often regarded as one of the best places to invest in UK property, properties in the North West have increased by 1.5%, which might indicate a healthier local property scene compared to the rest of the UK as we advance into 2024.
Considering the average property price in Liverpool is under £180,000 (according to the HM Land Registry House Price Index), it’s no surprise that sellers can increase their asking price, which still sits well below the national average.
Rightmove products that average asking prices will drop by a 1% average in 2024, giving buy-to-let investors time to take advantage of the market before property values increase in the near future.
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What Do the Experts Have to Say About the Rightmove House Price Index?
Tim Bannister had the following to say about the Rightmove House Price Index:
“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. This year’s upturn will be eagerly anticipated by those who are keen to sell, especially family movers who are considering having an estate agent board put up as the Christmas tree comes down.
“Rightmove’s research and agent feedback is that the best strategy to sell in the current market is to price temptingly at the outset of marketing, rather than testing the waters with a higher price.
“This will hopefully avoid the need to reduce your asking price later, and capture that early-bird buyer’s interest in the New Year, whilst also avoiding the stress of drawing out the selling process and risking having the for-sale board still up at Easter.”