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Seller Confidence on the Rise in UK Property Market

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    Sellers Sentiment on the Rise in the 2024 UK Housing Market

    Regarding the UK property market, seller confidence is usually good news for activity among property investors. If sellers are optimistic, it can mean more buyers enter the market due to favourable conditions.

    While 2023 was quiet for property investment compared to 2021 and 2022, the opening months of 2024 have indicated that the property has undergone a correction following unsustainable growth.

    Today, we’ll look at seller sentiment and consider why sellers are more optimistic in the UK property market.

    Discover More: If you’re looking for a guide to buy-to-let in the UK, check out our guide on the best buy-to-let areas.

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      How Are Sellers Feeling About UK Property at the Moment?

      Research indicates seller confidence is rising as the typically bustling Spring market approaches, coupled with anticipated interest rate reductions in the coming months.

      According to OnTheMarket’s most recent Property Sentiment Index, 60% of sellers in the UK expressed confidence in selling their properties within the next three months in February, marking an increase from 57% in January. Concurrently, 65% of active buyers maintained confidence in purchasing a property within the same timeframe.

      Find Out More: If you’re looking for more information on buying a rental property, consider our guide on the best place to invest in property in the UK.

      So, why is seller sentiment on the rise?

      We need to look at the 2023 property market to answer this question.

      Many buyers were priced out of the market due to high inflation (following COVID-19, European conflict, and the mini-budget fiasco). When inflation is high, the Bank of England raises interest rates to put people off borrowing. This led to increased mortgage rates, which made buying a house more difficult in the short term. With buyer activity low, more people moved into the rental market, which pushed rent prices up. Learn more about what a good rental yield is with our useful property guide.

      With rental prices expected to grow by 6% this year (per Savills), buyers are resuming their property investment strategies. Inflation has fallen to 4%, while interest rates have held at 5.25% since the summer of 2023. As a result, mortgage lenders have reduced their rates significantly. While the cost of borrowing remains elevated, it is much more affordable than last year, prompting buy-to-let investors to consider buying investment properties again.

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      How Did OnTheMarket Analyse the Latest Property Sentiment Index?

      President of OnTheMarket, Jason Tebb, said: “This may reflect the growing conviction around the likely trajectory of interest rates, with another rate hold in February further confirming expectations that rates have peaked and the next move will be downwards. Sentiment suggests buyers and sellers are simply getting on with the business of moving.

      “While inflation may still be twice the Bank of England’s 2% target, the worst of it seems to be behind us. Stock levels have increased, as one would expect at this time of year, as normal seasonal aspects play out.

      “While property prices have come off their peak a little in the past year, indices report a gentle uptick in national average prices rather than a continuing decline in values. As our data shows, there are regional variations, with micro-markets behaving differently depending on local demand and stock levels. Overall, though, the outlook for the market this year is far more positive than was the case several months ago.”

      Tebb also went on to say that the UK property market is “morphing into a more sustainable, encouraging state than the boom and bust of the past.”

      If you want to understand the UK buy-to-let scene, our area guides will help hone your investment strategies:

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      Dale Barham

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