The UK property market is displaying strong signs of revival, as evidenced by recent data released by the Bank of England and HM Revenue & Customs (HMRC). The latest figures highlight a surge in mortgage approvals and property transactions, signaling a robust recovery that could reshape the housing landscape in 2024.
Net mortgage approvals for house purchases climbed to 61,300 in March, up from 60,500 in February. This marks the highest level since September 2022, according to the Bank of England. Such figures are not just numbers; they represent growing confidence among potential homebuyers and a warming market environment.
Transactions on the Rise
HMRC has also reported an upward trend, with March witnessing the third consecutive month of increased property transactions. This steady rise is a clear indication that more people are getting involved in buying and selling properties, energising the market further.
Optimism Amid Challenges
Speaking to The Negotiator, John Phillips, Chief Executive of Spicerhaart and Just Mortgages, commented on the correlation between the market’s positive trajectory and activities within their branches. “The positive momentum we’ve been seeing in the market certainly continued in March,” Phillips noted, emphasising the resilience of the market despite potential disruptions from an early Easter and school half terms.
However, Phillips also cautioned about the potential impact of fluctuating mortgage rates, spurred by shifts in swap rates, which could destabilise the market’s recovery.
A Cautious Outlook
Tom Bill, head of UK residential research at Knight Frank, tempered expectations, stating, “Mortgage approvals and transaction numbers edged higher in March but it doesn’t feel like the UK housing market is ready for take-off this spring.” He attributed this to rising rates and persistent inflation, which delays the possibility of rate cuts by the bank, potentially dampening immediate growth prospects.
Financial Pressures and Future Hopes
“A wave of owners rolling off sub-2% mortgages agreed in early 2022 is adding to the financial pressures in the system,” Bill added. He predicts demand will strengthen once more affordable mortgage rates reemerge, aligning more closely with the Bank of England’s inflation targets.
Indicators of Future Activity
Jeremy Leaf, a north London estate agent, observed that despite a slight increase in mortgage rates, the approval numbers are a reliable indicator of forthcoming market activity, suggesting a healthy pipeline of sales and transactions.
Economic Conditions Boosting Market Confidence
Iain McKenzie, Chief Executive of The Guild of Property Professionals, pointed out the positive impact of improving economic conditions and declining inflation on the property market. McKenzie is optimistic about the potential boost in buyer confidence if the Bank of England decides to reduce its base rate from the current 5.25%—a rate that has been maintained since August of the previous year.