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New year, new demand: 2023 sees instant boost in UK housing market

After a somewhat predictable slowdown towards the end of last year, the UK housing market appears to be ramping up once again as serious buyers take to the stand.

Leading housing industry body Propertymark has released its latest Housing Insight Report analysing data from January, and it reveals some positive trends for 2023 so far as the post-Christmas period sparked a revival in both demand and supply in the sales market.

After the number of house hunters across the UK tailed off between October and December last year, the figures shot up again in January, with an average of 70 prospective buyers registering at each member branch. This is almost double December’s figure of 39.

Meanwhile, the report demonstrates that supply levels also soared by 80% between December 2022 and January 2023, with an average of nine new instructions per member branch during the first month of this year. While this still falls well below the number of people seeking properties, it is a sign of some easing of pressure.

What else is happening in the housing market?

It seems that house hunters aren’t just registering their interest, but are back in full force carrying out viewings and taking them forwards, according to the research. Propertymark found that the average number of viewings per property reached 2.9 in January, compared with 1.8 in December.

There was also a 50% increase in the number of sales agreed in the time period, although 73% of agents reported that most sales were agreed below the asking price. This is further evidence of a stabilisation in the surging house prices we have experienced over the past couple of years in the UK housing market.

As Propertymark points out, this figure is also more akin to what the housing market was experiencing before the pandemic. Between 2015 and 2020, an average of 78% of member branches reported that the majority of their sales were agreed below the original asking price, in what was a strong but much steadier market.

Rental sector still in high demand

While the sales side of the UK housing market appears to be surging in this first quarter so far, similar patterns were also recorded on the lettings side by Propertymark.

The number of people looking to rent, although still incredibly high, had begun to tail off towards the end of last year, with an average of 64 new tenant applicants per member branch reported in December 2022 – after a four-month decline in numbers.

However, in January, this almost doubled as an average of 108 prospective tenants registered at each member branch. Interestingly, this figure is just 9% lower than the number that registered in January last year, demonstrating the ongoing high demand in the sector despite rent rises.

In terms of supply in the rental side of the housing market, there has been little change over recent months. In January, Propertymark found that an average of 10 rental homes were registered as available at each member branch, just slightly up from December’s figure of nine.

But for each property available for rent, there were 11 tenants to view it, which shows that there is still ongoing pressure in the sector to provide enough accommodation to house the people who need it.

“Serious buyers in the housing market”

Nathan Emerson, CEO of Propertymark, said: January’s market has picked up pace with Propertymark estate agents reporting sales agreed up 50 per cent from December. Serious buyers are still very much in the market, but more homes are coming up for sale, meaning competition is considerably lower that what we have previously seen.

“This provides buyers with all important purchasing power, but sellers are still comfortably gaining with prices still higher than pre-pandemic levels.

“The number of applicants looking for to rental property rose sharply in January, and although we have seen a slight increase in the number of properties available per member branch, it is nowhere near enough to keep in line with high demand.”

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