22 February 2024 – Signs point to a growing market momentum in the UK property market, as the number of new property listings is rising.

Based on Rightmove‘s latest Housing House Price Index, new listings rose to 7% more than last year. This shows sellers’ confidence has increased, giving the housing market a boost.

Monthly and annual prices rise in February recorded

Average new seller asking prices increased to +0.9% or £3,091 more for February. The annual price change also mirrors this change, rising to +0.1%. 

A positive annual price is recorded for the first time since July 2023, following a yearly fall since August. 

Rightmove’s five-year asking price trends also bode well for the market. There is a significant and steady increase in average asking prices from the latter part of 2023 to February 2024. 

Sales support evidence for increased buyer and seller activity

The first six weeks of 2024 saw an uptick in buyer and seller activity. As previously mentioned, new property listings were 7% more than in the same period last year. The statistics of buyers enquiring to estate agents were also positively similar (7% higher). 

For the first weeks of 2024, figures for sales agreed already exceeded 16% more than the same period in 2023. Compared to 2019’s normal market, sales were also 3% higher. 

These figures indicate that many early-bird buyers feel that now is the right time to enter the market.

Budget-friendly new property listings are sold faster

Buyers are also more conscious of making purchasing decisions. Budget-accurate properties are bought immediately by buyers with stringent budgets. Meanwhile, sellers with over-priced properties have a more challenging time finding buyers. 

For example, it currently takes an average seller 16 days longer to find a buyer. The time to find a buyer is at its longest since 2015, excluding April and May 2020. 

This may be surprising as activity levels are higher than last year’s. Based on figures alone, buyers should be snapping up properties regardless of price. 

However, things have changed. Buyers dedicate more time to deciding which property they want to buy. Therefore, it’s crucial to put out new property listings that are reasonably priced. 

Rightmove’s data also supports this idea—sellers who do not initially over-price sell more quickly.

First-time buyers need more support to afford housing

Increased sales should signal that more buyers are getting into the property market. However, this sentiment doesn’t ring true for first-time buyers.

Compared to other sectors, first-time buyers have the least improved figures in buyer activity levels compared to last year. 

There has also been exciting news that the mortgage market has regained stability. Unfortunately, lenders may not be able to decrease rates much more. Borrowers may have to shoulder inflated rates in the future. 

Based on Rightmove’s analysis, affordability trends continue to work against first-time buyers. 

The gap between the average monthly amount spent on a first-time buyer’s home versus the equivalent rental payment continues to widen. Despite a slight dip in the first month of 2024, a difference of around £250 for February 2024 can still be observed between the two.

There continues to be a lack of overlap between the average asking price and the maximum principal amount for a one-person salary. Inflation and the cost of living also continue to add more pressure. The current economic landscape makes saving for a deposit challenging for potential first-time buyers. 

Currently, the only way first-time buyers can afford a home is to combine two salaries. Otherwise, it would be impossible. 

Our Opinion

There are definitely signs that the property market has started to pick up again, after the slowdown at the end of last year. However, we have to remember that market activity follows a cycle and February is when it traditionally picks up again.

And while an increase in activity, such as a rise in new property listings, is a good sign, Rightmove’s data also shows that there is a problem. The number of first-time buyers coming to the market is keeping up with other buyer groups.

This shows one thing very clearly, that affordability is still a huge issue. A property market without first-time buyers can’t be a healthy one, because if they aren’t in the market, second-steppers can’t sell their homes and buy bigger ones.

Without first-time buyers, the market will eventually stagnate. So while an increased activity is good news, we shouldn’t get too excited yet. The property market faces a huge challenge.

With prices still high and interest rates at an elevated level, first-time buyers are struggling to get a foothold in the market. While they might cope with either the one or the other, both combined make affordability an almost unsurmountable challenge.

It all comes back to the same issue: a lack of affordable homes. And while there are calls for more financial help for first-time buyers from the government, this won’t solve the issue for long.

If first-time buyers get more money to spend, the number of sales will go up and with that the prices. And we are back to where we were. So what we need is more affordable properties.