After a slowdown towards the end of last year, the UK housing market showed signs of bouncing back in January, with a rise in both sales and rental demand as house hunters sought out their ideal properties.
The latest Housing Insights Report from leading industry body Propertymark revealed an 80 per cent increase in buyer demand and a 50 per cent boost to the number of sales agreed from December to January, along with continued strong demand for rental properties. As we have seen for a long time now, there remains a significant imbalance between the number of prospective tenants and properties available on the market.
Sales Market: Supply and Demand Rises
According to the report, the average number of new prospective buyers at member agency branches rose from 39 in December to 70 in January. Meanwhile, the average number of viewings per property jumped from 1.8 to 2.9 – although this is still significantly down from earlier in 2022.
As well as an increase in the number of buyers searching for properties, the data also revealed a sharp increase in the number of sales agreed – which were up by 50 per cent in January. Despite this, more than 70% of agents reported most sales were agreed at below the asking price, which is comparable to the average recorded before the pandemic took hold in 2020.
In terms of supply, the number of properties coming onto the UK housing market soared by 80 per cent as people pushed ahead with their plans following the Christmas holidays. On average, there were nine new instructions per member branch, compared to just five in December.
Rental Market Continues to Soar
Rental demand has surged over the last few years – and it’s a situation that shows few signs of slowing down.
According to Propertymark’s report, the start of the new year brought a significant increase in demand from those looking to rent, with 108 new applications registered per member branch in December 2023 – just nine per cent lower than in January 2023.
Despite price increases, there continues to be an overwhelming demand combined with a lack of supply. On average, there are 11 prospective tenants registered for every property currently available to rent, despite a slight increase in the number of properties coming onto the market.
Members also reported most rents remaining the same – the first time we have seen this since the pandemic.
So, what does this all mean?
Despite the doom and gloom amidst a grim economic outlook and a backdrop of rising interest rates and mortgage chaos, the property market has largely so far defied many expectations – although it should be noted that this jump in demand is also a regular seasonal trend.
Nathan Emerson, CEO of Propertymark, commented:
“January’s market has picked up pace with Propertymark estate agents reporting sales agreed up 50 per cent from December. Serious buyers are still very much in the market, but more homes are coming up for sale, meaning competition is considerably lower than what we have previously seen. This provides buyers with all important purchasing power, but sellers are still comfortably gaining with prices still higher than pre-pandemic levels.
“The number of applicants looking for rental property rose sharply in January, and although we have seen a slight increase in the number of properties available per member branch, it is nowhere near enough to keep in line with high demand.”
As ever, it will be important for property investors to closely monitor the UK housing market, although this report is certainly encouraging. In times of challenging economic conditions, things can change at a rapid pace, although there continues to be many opportunities out there – especially for the right properties in the right sectors.
Want to discuss the property market with one of our Portfolio Managers? Please give us a call or reach out using our contact form and we will be happy to get back to you.
Important note: The information provided in this article is general in nature and does not constitute personal financial advice. If you are unsure whether an investment is right for you, please seek professional advice. If you choose to invest, the value of your investment can both rise and fall so you may get back less than you put in.