A boost in available properties for sale is one factor that makes the current conditions more of a buyer’s market, so is it time for property investors to make their move?
The UK housing market has ramped up over the course of 2024, with a strong rise in the number of transactions being completed compared with last year, along with consistent house price growth reflecting greater economic confidence.
For property investors, mortgage rates have been a stalling point for many, but these are now in a significantly better place than they were a year ago, with economists predicting them to fall even further over the next 12 months.
In a buyer’s market, there tends to be a number of factors that make the situation increasingly enticing for prospective buyers. These range from a greater level of choice (or housing supply), which means there is less competition for each property. Sellers must therefore price competitively, which could mean property investors can secure a better deal than they might when supply is scarce.
Lower levels of price growth compared with the norm, or with the five-year average, can also tip the scales towards it being a buyer’s market. On one hand, buyers will be more keen to act in order to make the most of the steadier rise in value, while also allowing them more time – with less pressure – to make the right investment.
Buyers’ market puts investors in driver’s seat
According to Nathan Emerson, chief executive of Propertymark, serious buyers are “in the driving seat” when negotiating on property at the moment, due to the higher level of choice available.
This was in response to Rightmove’s latest House Price Index, which revealed that the combination of figures in their analysis pointed towards a buyer’s market.
It noted that the number of sales agreed so far this autumn is 29% higher than this time last year, while 17% more people were enquiring about properties for sale. While it hasn’t picked up the pace seen in the post-pandemic period, when there was an unprecedented level of activity and appetite, the market is busy for buyers looking to make a solid investment.
House price growth, while remaining on a steady upward trajectory, has also been lower than average this month, with a 0.3% monthly rise compared with the average normally seen for this time of year of 1.3%. This is because sellers are currently pricing their homes more competitively, which is partly to do with the affordability constraints being faced by many buyers.
There’s also been a 12% increase in the number of property for sale, giving homebuyers and investors a much greater array of options on the table. Rightmove notes that the average number of listings per agent is actually at its highest level since 2014, which is a huge contributing factor towards it being a buyer’s market.
Time to sell has also increased slightly over the past three months, as buyers and investors have the luxury at the moment of taking their time to make their decisions.
A positive year ahead
Whether it will remain a buyer’s market is uncertain. Affordability constraints may begin to ease, and as mortgage rates decrease this may bring more buyers to the table, removing their negotiating powers.
Marc von Grundherr, director of Benham and Reeves in London said: “Mortgage approval levels have been strengthening for much of this year and we’re now seeing this increase in buyer demand start to filter through to actual sales, with monthly transactions being the strongest since 2022.
“This improving market momentum has also helped to tempt many sellers back into the market who had previously put their plans to move on pause.”
Rightmove’s property expert, Tim Bannister, said: “With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched. Some sellers appear to be acting on this caution, contributing to limited price growth and better buyer affordability. This is helping to keep the number of sales being agreed consistently and strongly ahead of the quieter market of this time last year.”
On his predictions for 2025, Tim said: “Despite a Budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025. Market activity remains strong, despite affordability pressures on movers. Once we have more certainty about the contents of the Budget, hopefully followed by speedy second and third Bank Rate cuts, we could see another surge in market optimism like we had in the Summer.”
