The first month of the year has started positively with more buyers registering to buy and more new housing stock coming to the market. According to Rightmove, 27% more properties are available on the market today compared to a year ago. Furthermore, 11% more sales have been agreed in the period between Boxing Day and mid-January compared to last year; this could be due to a mini surge in activity directly after the pre-Christmas downturn.
Stamp duty concessions ending on 31st March could also be a factor as to why more home movers have been active over the New Year period. Many buyers hope to complete a purchase before stamp duty reverts back to higher levels, however this is most unlikely due transaction times.
For the majority of last year interest rates were the biggest influence to the housing market with continuous speculation as to whether the Bank of England would reduce them. Although there were two rate reductions last year, many feel this has not been enough to restore confidence. We speak to many potential sellers who fixed into sub 2% five-year mortgage rates in 2020 and 2021 and are now concerned that current mortgage rates are not affordable. On top of this, some are now needing to pay back Help to Buy loans. The next eighteen months are going to be testing for homeowners if mortgage rates don’t reduce moderately. The Bank of England meet next week so many mortgage borrowers and first-time buyers will be keeping a close eye on their decision.
The rental sector remains strong; rents are at record high levels which to due to the shortage of available housing stock. Potential tenants still face strong competition for properties when they become available. With the pending introduction of the Renters Rights Bill later this year, this sector expects to experience some turbulence in the months ahead with many landlords needing to become more organised and compliant.
Each January we look forward with optimism but each year the housing market faces many twists and turns but somehow it has always remained resilient.