UK Property Sales and Demand Well Above December 2022 Levels
In the closing weeks of 2023, property sales and demand in the UK surged by nearly a fifth compared to the preceding year, signalling a positive shift in sentiment in the property market, as reported in a recent Zoopla survey.
This should serve as good news for people looking to purchase a buy-to-let investment in the UK next year.
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How Were UK Property Sales and Demand in December 2023?
The website disclosed that newly agreed-upon sales experienced a notable uptick of 17% in December compared to the same period the previous year. This rise starkly contrasts the subdued market activity observed a year ago when elevated mortgage rates had a dampening effect.
The surge in demand was equally pronounced, with a 19% increase measured by the number of potential buyers contacting agents to inquire about and schedule viewings for specific properties listed on Zoopla.
Zoopla attributes this heightened demand, in part, to a concurrent increase in the number of homes for sale, providing prospective buyers with a wider range of choices and bolstering overall sales activity.
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How Did House Prices Fare in December 2023?
Zoopla’s data for the month revealed an annual decrease in house prices across the country, with a national average fall of 1.1%. However, London experienced a more substantial decline of 1.5%. However, if you’re looking for buy-to-let properties in London, you can still expect to pay an average home price of £536,800.
Cash transactions accounted for a significant portion, representing a third of all property sales, while transactions involving mortgages saw a decline of one-third. This decline can be attributed to the impact of higher interest rates, which were raised by the Bank of England in successive steps, reaching 5.25% by August. However, since then, the base rate has remained unchanged.
The recent drop in inflation, falling to 3.9% last month, has kindled optimism for potential rate cuts in the coming year. In response, mortgage rates have already started to recede, with the average for a two-year fixed-rate mortgage standing at 5.95%, and for a five-year fixed-rate mortgage, it is 5.55%, according to data from Moneyfacts.
Interested in finding out more about the buy-to-let market? Consider reading our pros and cons of buying a rental property guide, where we cover everything you need to know about buy-to-let investment. And if you want to know about some of the sound property investments, check out our guide on the best things to invest in right now. We also have a helpful guide on the best place for property investment.
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What Is the Property Market Outlook for 2024?
This shift in mortgage rates is anticipated to further influence the property market moving into 2024 – Zoopla expects one million property sales over the next 12 months.
Richard Donnell, executive director at Zoopla, had the following to say about the Zoopla House Price Index: “The housing market has been more resilient than many expected over 2023, but it hasn’t been a surprise to us. Mortgage regulations introduced in 2015 have stopped an overvaluation of housing, which is why the decline in house prices has been modest over the year.
“House price falls have been concentrated in the south and Midlands while prices are still slightly higher over the year in Scotland and Northern Ireland. UK housing still looks expensive by historic standards, which is why we expect UK house prices to fall a further 2% over 2024 as prices and incomes realign.”
For more information on the UK property market, consider reading some of our buy-to-let city guides, such as:
