C James & Co January property market update

Published: 01/02/2024 By Alistair Wiltshire

January 2024 Property market update  
According to Zoopla house price falls are slowing as more sales are being agreed in the first weeks of 2024. Get the latest on property prices and market trends with our House Price Index for January 2024.
Pace of annual house price falls slows
House prices continue to adjust to higher mortgage rates through modest price falls. However, price falls are slowing as more sales are agreed at the start of 2024.
House prices have fallen -0.8% in the year to December 2023, compared to a -1.4% fall in the year to October 2023.

Buyer demand rises at the start of 2024
There has been a strong seasonal uplift in buyer demand in the first 3 weeks of 2024.
Sub-5% mortgage rates mean buyer demand is sitting 12% higher than a year ago, although still 13% below the 5-year average.(Zoopla)
This reflects a return of pent-up buyer demand following a weak second half of 2023. Many buyers delayed moving in the face of rising mortgage rates.
All measures of housing market activity are up year-on-year
The uplift in agreed sales in the final weeks of 2023 has continued into 2024. This suggests buyers and sellers are becoming more aligned on pricing after over a year of tussling.
New sales are 13% higher than a year ago. There’s also been a 22% uplift in the flow of homes listed for sale. This indicates that people are feeling more confident in listing their home for sale again, boosting choice for buyers and keeping prices in check.

A turn for the London housing market?
London has seen the biggest rebound in buyer demand at the start of 2024.
House prices have risen 13% in London since 2016
London is now the most affordable it’s been since 2014 thanks to low price inflation and rising earnings. Improving affordability in London is positive news but home buyers still face a huge challenge with mortgage rates twice as high as in 2021.
We expect London’s market conditions to keep improving in 2024 with earnings rising faster than house prices, which will support sales numbers.

Let’s not forget we are still in a ‘buyers’ market
It’s good to see renewed activity in the market but it’s important not to over-interpret what this might mean for 2024.
Last year, mortgage rates fell to 4.2% in the first 3 months of the year, which supported sales volumes and led to only modest price falls. We expect current mortgage rates to have the same effect this year, supporting sales volumes rather than hugely impacting house prices.

House prices will be kept in check by several factors:
  • A greater supply of homes for sale giving buyers more choice, especially for larger family homes.
  • Half of those with a mortgage are yet to refinance onto a higher mortgage rate, keeping people price-sensitive and focused on value when they move house.
  • A small but not insignificant number of sellers cutting their asking prices to attract interest, continuing this 2023 trend.
  • 1 in 5 sellers accepting more than 10% off the asking price, and close to 1 in 4 across London and the South East.
If you’re selling your home, price realistically if you’re serious about moving. Improved market conditions will help you get a sale - but don’t take that to mean you’ll get a result at a higher price.

What to expect in the housing market in 2024
The adjustment to higher mortgage rates was always going to take longer than a year, especially given the only modest fall in house prices in 2023.
It seems unlikely that mortgage rates will fall much further in the near term, remaining in the 4% to 5% range and the best deals for big deposits.
Lower mortgage rates are welcome news but will support sales rather than price rises in 2024.

Wimbledon Office 
T: 0208 542 3232
E: wm-sales@cjames.co.uk

Colliers Wood Office
T: 0208 543 9001
E: cw-sales@cjames.co.uk 

Tooting Office
T: 0208 672 7000
E: stuart@cjames.co.uk