LogoLogo
County Durham
Avenue House, Suite 3 Greenwell Road, Newton Aycliffe, DL5 4DH
Teesside
8 Town Square Billingham TS23 2LY

January Property Market Analysis

11 months ago
January Property Market Analysis

December marked a year when we returned to what agents call ‘normal’ sales conditions. But what is normal? It means historically average mortgage rates, sellers having to be realistic when it comes to pricing and an absence of cataclysmic events.  

Vendors continued to be sensible in December, with Rightmove commenting that the average new seller asking prices dropped by 1.9% (-£6,966) during the month. The new average asking price is now £355,177. How did new seller average asking prices change over the year? They ended 2023 just 1.1% below December 2022’s value.   

House prices hold firm

December was also a good month to retrospectively look at sold house prices. Predictions made at the end of 2022 forecast house prices would fall anywhere between 2% and 30% in 2023. The upper end of the scale couldn’t have been further from the truth.   

Mild adjustment, not a major crash

Nationwide’s December House Price Index showed property values had fallen a modest -1.8% during 2023. Zoopla noted an even more subtle price correction. The portal said house prices decreased just -1.1% over the last 12 months.   

What lies ahead for 2024? Nationwide factored in wage growth, inflation and mortgages rates to forecast that house prices may stay the same or decrease by no more than 2%. Zoopla predicts value decreases of 2%, with 1 million sales, while its compatriot Rightmove says a modest average -1% fall in new seller asking prices should be expected in 2024.  

What will affect house prices and positivity are mortgage rates. The Bank of England decided to freeze the interest rate at 5.25% in December – the third consecutive hold – with tantalising talk of a possible reduction in 2024. The effect on mortgage rates has been noted. In mid-December, Rightmove revealed it had seen mortgage rates decrease for the 20th week running.  

Mortgage rates are forecast to fall further. Already, there are some five-year fixed deals below 4%. If the base rate and the swap rate – the latter based on what the markets think interest rates will be in the future – decrease as forecast, even more affordable mortgages could arrive by the spring.   

The end of 2023 saw a little heat subside from the rental market. Propertymark’s report issued at the end of December was based on answers from its 17,500 agent members. Although many saw rents rise, a growing number of agents reported falling rents. In fact, 25% reported decreases – a figure up from 14% in October and 4% in September.  

Rental market starts to moderate

This trend was also reflected by HomeLet. Its Rental Index released in December showed the UK average rent decreased by -0.3% in November. Although a tiny adjustment, it halted the run of rent increases that characterised 2023.  

A correction in the UK rental market can also be drawn from additional Propertymark figures. While 86 prospective tenants registered per branch towards the end of 2023, there was a 26% fall in the number of new tenancies signed. This may be down to only nine properties being available to rent per branch.  

The jury’s out on future rent rises

There are conflicting forecasts for rents in 2024. Rightmove feels the number of tenants looking for new rentals will still outweigh demand. Therefore, it expects rents to increase by 5% during 2024. For comparison, annual rent increases frequently reached double digits in 2023.  

Conversely, Propertymark expects a greater number of agents to report rent decreases. More affordable rents may be a result of improving stock levels. At the end of 2023, Rightmove found the number of properties available to rent was 11% higher than at the same point in 2022.  

If you would like to know more about your local property market, please get in touch.

Share this article

Sign up for our newsletter

Subscribe to receive the latest property market information to your inbox, full of market knowledge and tips for your home.

You may unsubscribe at any time. See our Privacy Policy.