UK Housing Market Update: Key Insights for Buyers and Sellers in October 2024

The UK housing market has experienced significant changes recently, with increased buyer demand, competitive mortgage rates, and a rise in sales activity. If you're thinking about buying or selling a home, understanding the current market trends is essential. Here’s an overview of market trends, mortgage rates, and price inflation, along with advice for navigating these changes.

Positive Trends in Buyer Demand and Sales Activity

Buyer demand has surged nationally, up by 26% compared to a year ago, driven by more homes being listed and buyers who are also sellers looking for their next property. The number of available homes for sale is 12% higher than last year. Sales agreed have risen by 23.4% in Q3 2024 compared to Q3 2023, even surpassing 2019 levels. Exchanges are up by 10.9% compared to Q3 2023.

Average mortgage rates have also decreased. The average rate for a new 5-year fixed loan at 75% loan-to-value (LTV) is now 4.3%, down from 5.5% a year ago. This has enabled more buyers to enter the market, leading to a 25% increase in agreed sales compared to a year ago. Regions like the East Midlands and the North East have seen sales volumes rise by over 30%, with the rest of the UK seeing an increase of over 10%.

Modest House Price Growth

House price inflation remains subdued, growing at an annual rate of 0.7%, a slight improvement from last year's -0.3%. However, in some regions, like the South West, South East, and East of England, house prices are still below previous levels due to affordability issues. London has seen a modest increase of 0.5% after a decline of -1.7% a year ago. The supply of properties for sale in the UK is at its highest level in six years.

Renting Vs. Buying: A Shifting Landscape

Despite improvements in mortgage affordability, first-time buyers across most of the UK are still better off renting, except in southern areas where purchasing has become more favorable. Landlords are also exiting the market, particularly in London, where former rental properties are being sold at higher rates than the UK average, increasing pressure on the rental market.

Sensible Pricing is Key for Sellers

Strategic pricing is essential for sellers. Nearly 37% of sales are agreed at prices 5% or more below the original asking price. While sales prices are stabilizing, buyers remain cautious and price-sensitive. Sellers need to set realistic asking prices to attract serious buyers, particularly in slower markets. Additionally, 32% of homes for sale are chain-free, a significant advantage for buyers seeking quicker transactions.

The Outlook for 2025

The housing market is expected to continue recovering in 2025, with mortgage rates likely to stay in the high 3% to low 4% range. Sellers will need to remain flexible with their pricing strategies, while buyers can benefit from more choices and attractive mortgage rates. However, interest rates could fluctuate due to global events, affecting future borrowing costs.

Conclusion

The UK housing market is steadily recovering, with increased buyer demand, rising sales, and stabilizing house prices. Although affordability remains an issue in some regions, lower mortgage rates and a larger supply of homes create opportunities for both buyers and sellers. Now may be a good time to enter the market, but realistic pricing is essential for a timely sale.

Interested in knowing the sale value of your property? We offer a FREE no-obligation market appraisal. Visit mchugohomes.co.uk or contact us at movinghome@mchugohomes.co.uk to discuss your next steps in the property market.