We are already a quarter way through the year and Q1 has been a bit stop and start. The beginning of the year started particularly well with more activity from both sellers and buyers than in recent years. Nationally, January saw more sellers coming to the market than in any of the previous 8 years and sales were up over 17% against 2023.
However, February was a bit of a contrast, generally activity was down and confidence was lower, possibly because some mortgage lenders edged their rates up after initially dropping them in January. Maybe the market reacted to the fact interest rates were still uncertain?
March has been different again, definitely more activity than February and boosted by the Bank of England holding interest rates for the fifth consecutive time but more importantly relaying the message that interest rates are likely to drop shortly. We believe people are now seeing an end to the negative cycle that has hung over the market for the past two years. It feels, at the moment, the market and the house buying public are very sensitive to media reports and speculation about mortgage rates, house prices or activity.
The two biggest factors which currently seem to influence the market locally are confidence and over supply of property. House movers are still clearly nervous and need some stability to inject confidence, maybe a drop in interest rates and some positive news will be the tonic required. The vast number of properties locally for sale is still a problem to many sellers, they are competing with so many other properties for that magical buyer. The number of new homes available with fantastic incentives offered by the national house builders is huge competition to many sellers, their incentives are something that cannot always be matched.
Even when the market recovers properly and buyers return in greater numbers, it will still take a period of time to reduce the surplus housing stock. We notice many sellers have still not adjusted to the current market conditions and still want to achieve sale prices seen in 2021, this is simply unrealistic. These sellers will no doubt have to eventually withdraw from the market and think again in the future.
Looking forward to better weather, longer days and traditionally one of the busiest periods of the year, we hope April can be as good as March, if not better? The market requires stability and consistency for a few months and we hope that when the Bank of England next meet on the 9th May, the time will be right to reduce interest rates, something that is eagerly needed to help with affordability.
We wish all of our customers, past and present a peaceful Easter period and with regards to the property market we look forward with optimism.