The UK property market is showing signs of stabilization and recovery as demand from buyers strengthens, according to a recent survey by property website Rightmove. In February, asking prices for homes rose by 0.1% compared to the previous year, marking the first annual increase since August 2023. This article explores the key findings of the survey, highlighting the factors contributing to the market’s improving conditions.

Growth in Asking Prices and Market Activity

Rightmove’s survey reveals that asking prices for homes in the UK increased by 0.9% in February compared to January. This growth aligns closely with the 10-year average monthly rise of 1.0% for February. The property sector, which experienced a slowdown previously, has seen a resurgence in recent months due to falling mortgage interest rates and expectations of the Bank of England lowering borrowing costs in the near future.

Increased Sales and Market Confidence

The survey also indicates a positive trend in sales activity, with a 16% increase in agreed sales during the first six weeks of 2024 compared to the same period in the previous year. Furthermore, sales were 3% higher compared to 2019, before the onset of the coronavirus pandemic. Additionally, properties coming onto the market and buyer enquiries have both seen a notable increase of 7%, reflecting growing confidence among buyers.

Cautious Optimism Amid Mortgage Rate Considerations

Tim Bannister, the Director of Property Science at Rightmove, expressed cautious optimism about the market’s trajectory. Despite the recent stability in the mortgage market, Bannister acknowledges that mortgage rates still remain relatively high when compared to historical levels. The Bank of England has indicated that it requires further evidence of easing inflation pressures before considering rate cuts, despite the recession experienced by the UK economy towards the end of last year.

Corroborating Signs of Market Improvement

Rightmove’s survey findings align with other indicators of a recovering housing market in the UK. The Royal Institution of Chartered Surveyors reported a significant increase in new buyer enquiries, the highest in nearly two years. Mortgage lenders Nationwide and Halifax have also reported a rise in house prices for January, further supporting the positive trend observed in the market.

The UK property market is showing signs of stabilization and recovery, with the latest survey by Rightmove indicating the first annual increase in asking prices since August 2023. The market’s upward trajectory can be attributed to factors such as falling mortgage interest rates and expectations of future rate cuts by the Bank of England. Increased sales activity and growing market confidence further bolster the positive outlook. However, cautious optimism remains due to the relatively high mortgage rates compared to historical levels. With corroborating signs of improvement from other industry reports, the UK housing market appears to be on a path towards recovery and growth.