The UK housing market is seeing a steady number of prospective buyers, and tenant demand remains high, causing rents to edge further up.
The latest insights from Propertymark, which analyses the activity of estate and letting agencies across the UK, show a robust housing market as we progress further into 2023.
March’s figures reflect a sales market that is picking up pace as buyers and property investors are not being deterred by current economic conditions, and with the lettings sector, tenant demand remains at high levels as rents increase.
This report further points out that, despite numerous bleak forecasts from the end of 2022 for the UK housing market, the latest figures actually show a thriving housing market with little sign of investor, buyer and tenant demand dwindling.
Appetite among buyers and investors
Buyers and investors are continuing to return to the housing market. The average number of new prospective buyers registered per Propertymark member branch remained at a strong level of 93 during the month of March.
There were 94 on average in February, showing demand among buyers is remaining robust. Additionally, the average number of viewings per property remained steady with an average of 3.2. This has increased from 1.8 in December.
In recent months, supply of new homes for sale has remained steady, while the total stock of properties available continued to edge up in March.
There has been a 29% increase in properties available for sale since a year ago. Additionally, since the last month of 2022, there has been a 160% rise in the number of market appraisals conducted per member branch.
Nathan Emerson, CEO of Propertymark, said: “With the number of sales and appraisals month on month remaining healthy, a strong appetite continues within the sales market.
“The total number of properties for sale is edging back to pre-pandemic levels which is positively supported by an increase in market appraisals being undertaken.”
In terms of house prices, there has been little change month-on-month with about 75% of agents reporting that most sales were agreed below the asking price.
Imbalance in tenant demand and supply
On the lettings side, the level of tenant demand continues to be at high levels, and supply is not keeping up. This is putting upwards pressure on rents, and it means most landlords are seeing a lot of interest in their properties as they are snapped up quickly.
In March, the number of new prospective tenants registering per branch held at 106. This figure has increased significantly from the December low of 64. At the same time, the number of properties available to rent remained stable at 10 on average last month.
Emerson commented: “In the lettings sector, the issue of undersupply remains with no movement seen in the number of properties available to rent. This translates to an average of 10 prospective tenants registering per available property.”
Due to the imbalance in demand and supply, some 58% of agents reported rents rising month-on-month on average at their branch. This is also happening as wage increases have restored some relative affordability.
What’s next for the UK housing market?
In terms of the sales market, the UK housing market is expected to continue gaining further momentum as we head into the summer months and as the mortgage sector stabilises even further. This is happening as the property market is in much better shape than many in the industry were predicting at the end of last year.
The sector is even considered to be more in balance and healthier than at any time in the last three years. And there is an underlying confidence in the housing sector when focusing on long-term trends.
Across the private rented sector, demand is expected to continue outweighing supply. Robust tenant demand is pretty much being seen across the UK, and this will likely remain the case.
The shortfall of properties to rent is forecast to push rent prices up further. RICS is predicting that rents are set to increase roughly 4% over the next 12 months, and this is expected to be seen in many areas in the UK.
BuyAssociation is a property investment consultancy specialising in the UK housing market. Get in touch today if you’re looking for your next home or property investment.