UK property market shows steady signs of improvement as sales rise in February
Green shoots continue to emerge in the property market as the number of house sales grows by a steady one per cent month-on-month.
According to the latest reading from HMRC, housing transactions grew from 81,930 in January to 82,940 in February.
This is six per cent lower when compared to same period the year before, but marks the second month of increase.
Britain’s residential property market has shown signs of reliance despite mortgage rates rising again, and the central bank holding interest rates.
Karen Noye, mortgage expert at Quilter said: “All eyes are on the Bank of England as we await its first interest rate cut.
“It will now have some confidence that inflation is finally coming to heel, but has a difficult balancing act ahead of it and will be reluctant to move too much too quickly so we are likely to be waiting for some time yet.”
She added: “This will have a knock-on effect on the housing market as many prospective buyers will likely be holding out in the hopes of lower mortgage rates.”
“Once the Bank does begin lowering its base rate, however, it would present a more favourable borrowing landscape which could pull prospective buyers out of ‘wait and see’ mode and accelerate the housing market’s recovery”
On Thursday, Richard Donnell, executive director at Zoopla said: “Rising wages and falling mortgage rates have boosted consumer confidence and this is feeding into improving levels of housing market activity over the first quarter of 2024.”
The property portal reported sellers are now accepting a median average discount to the asking price of £10,000, down from £14,250 last November.
In the last month annual house price inflation has fallen by 0.3 per cent across the UK up from a recent low of -1.4 per cent.
Tom Bill, head of UK residential research at Knight Frank said: “UK housing market activity has improved in recent months but demand hasn’t been fully unleashed yet. Mortgage rates are lower than October but up since January due to stubborn underlying inflation.
“A wave of people rolling off sub-two per cent two-year mortgages from early 2022 is adding to the financial pressures in the system. It means that transactions in February were down by around a fifth compared to the five-year average. “
He added: “Despite the headwinds, which include wider political instability, there will be a recognisable spring bounce in activity and we expect UK prices to rise by an average of three per cent this year as the market recovers from a subdued 2023.”