#22 Spring brings optimism to UK housing market as buyer demand grows

The UK housing market is witnessing a promising resurgence in 2024, signalling a positive turn after a period of subdued activity in 2023.

Amidst improved economic conditions and more affordable mortgage rates compared to the previous year, buyer demand is steadily increasing. This uptick in demand offers reassurance to buy-to-let investors, reflecting a broader optimism in the market.

A recent analysis by the Royal Institution of Chartered Surveyors (RICS) sheds light on the current state of buyer interest in the housing market for 2024.

According to RICS, there's a notable upswing in various indicators, including buyer inquiries, sales, and house prices. In March 2024, a significant net balance of +8% of respondents reported a rise in new inquiries, marking the most positive result since February 2022.

On the supply side, there's also a positive trend, with a net balance of +13% of respondents noting an increase in new listings entering the market for the fourth consecutive month in March. This rise in new instructions suggests a growing inventory of properties available for sale.

Looking ahead, industry experts anticipate further growth in housing market activity, with a net balance of +13% predicting an increase in sales volumes over the next three months. Additionally, a substantial net balance of +46% of respondents forecast a rise in sales activity over the next 12 months.

Moreover, the downward trajectory of house prices has shown signs of stabilising, with the rate of decline slowing down for the seventh consecutive month. This suggests a more balanced outlook for house prices across the UK.

In response to the data, senior economist for RICS, Tarrant Parsons, expressed optimism about the market's recovery. Parsons highlighted the gradual improvement in demand and the potential for further support from the Bank of England, with expectations of interest rate reductions later in the year. This favourable economic backdrop is expected to sustain market momentum in the foreseeable future, albeit with some limitations due to higher mortgage rates compared to previous years.

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