The UK property market has made a full recovery from the pandemic slump, according to recent data from Rightmove. Interestingly, the recovery in property sales is most evident in London, where agreed sales are now 11% higher than they were in March 2019.
Matt Johnson, Area Director at Lettings and Estate Agent JOHNS&CO, says: “Data from the first quarter of this year revealed that new offers have surged by 85% compared to the same period last year, and we’ve seen our agreed sales grow by 33%.”
These positive trends have emerged despite the Bank of England’s recent decision to raise its base rate for the 13th consecutive time. The latest increase from 4.5% to 5% marks a sharp 0.5% rise, twice the anticipated increment of 0.25%.
“We don’t expect this latest increase to dampen buyer demand or enthusiasm,” Johnson assures. “Ever since the initial shock rate rise from 0.25%, we’ve observed that buyers are not deterred by these increases.”
Johnson explains that while the mortgage market is currently on a rollercoaster ride, with lenders withdrawing products and raising rates, the release of 100% mortgage products indicates their ongoing confidence in the long-term property market. “The fact that the cheapest mortgage rates are longer term fixed for five or ten years suggests lenders anticipate a drop in the base rate and easing of living costs over time,” he adds.
Despite increased buyer demand, property prices across London have remained steady, revealing buyers’ sensitivity to the recent interest rate hikes and cost of living. Therefore, the current climate remains favourable for those seeking investment properties.
The demand for rental properties also continues to be robust. Zoopla’s Rental Market Report reveals that the need for rental accommodation is particularly strong in urban areas, notably London and the South East. This demand persists despite private rented housing supply only growing by 1% since 2016.
Despite the rise in the cost of living, both rental demand and prices remain higher year on year. JOHNS&CO’s current tenancy renewal rate stands at 65%, a noteworthy increase from the 2022 figure. Encouragingly, 95.3% of these renewals have come with a rental increase, indicating that tenants are willing to absorb rising costs.
Johnson concludes: “Overall, the property market is exceeding expectations and provides a positive landscape for both vendors and landlords. Vendors have the opportunity to capitalise on high property demand, while landlords can make the most of the high rental demand. With the right strategies, both vendors and landlords can navigate these favourable market conditions for a beneficial outcome.”