The property market showed signs of stabilizing in February after a period marked by economic challenges, according to OnTheMarket’s latest Property Sentiment Index.
Active property buyers in the UK seem eager to proceed with purchases, with 65% believing they’ll buy a home within the next three months—a figure that remains steady from January. As for sellers, 60% feel they will successfully sell within the next three months, which is up from 57% in January.
- 65% of active UK homebuyers are confident about buying within the next three months.
- 60% of UK home sellers are confident about selling within the same timeframe.
- 43% of properties were marked as Sold Subject to Contract (SSTC) within 30 days of listing, which is consistent with figures from February 2023.
- Borrowers are adjusting to the reality of higher mortgage rates.
Jason Tebb, OnTheMarket’s President, shares insights from their recent report:
In February, the housing market seemed to hit its normal rhythm again. This return to a “normal market” is significant after two turbulent years due to uncertain economic conditions, government changes, policy shifts, and volatile mortgage rates. Confidence is relatively high across the board, with buyer confidence holding steady from January at 65% and seller confidence climbing to 60%. The steady interest rates in February may have reinforced the belief that rates have peaked and will soon decrease.
Both buyers and sellers are pushing forward with their plans to move. Despite inflation remaining high, the worst seems to be over. We’re seeing more properties come to market, which is typical for this season, and though property prices have slightly declined over the past year, there is a slight increase in the national average prices rather than a drop. Market dynamics vary by region, but overall, we’re seeing a more hopeful market than a few months ago.
Concerns grew among borrowers about securing mortgages in February, with 8% feeling concerned, a slight increase from 6% in the previous month. This response is attributed to rising mortgage rates and higher rates on ‘best buy’ deals set by lenders. This follows the short-lived mortgage rate competition in January. Borrowers are coming to terms with the new normal—which is higher mortgage rates—and are adjusting to a wave of credit that’s not as cheap as before. Adaptation is key, and the evidence suggests they are adjusting, with more properties selling quickly after listing—an optimistic signal for the spring market. The Bank of England reports increased mortgage approvals, showing that buyers and sellers are ready for a stable market, even with the general election approaching, and are optimistic despite potential challenges.
National Outlook
This month’s Property Sentiment Index is once again backed by feedback from agents nationwide, supporting a more optimistic perspective on the market in February.
Agents in Greater London are observing the market’s resilience, with a noticeable increase in buyer registrations and sales agreed upon. Sellers see the market as a chance to move up the property ladder, supported by the hope of rising prices. Agents are finding homes are being priced more sensibly.
The North West saw more homes for sale, resulting in a market with more options for buyers. Sales levels remained strong despite another hold on interest rate changes, suggesting earlier hopes for a quick rate decrease are fading.
Agents in the South East stress the importance of realistic pricing, especially in the higher-end market, while the more common properties are receiving offers just below the asking price.
Activity is buoyant in Wales, with a surge in buyer registrations and viewings. Softer mortgage rates and optimistic news about inflation seem to be contributing factors to growing buyer confidence and a thriving market cycle.
OnTheMarket’s full report is available here.
