Positive trends in the UK economy boosting property sales

The UK’s sought-after housing market is experiencing a surge in activity, fuelled by growing buyer confidence in the UK economy owing to a decline in inflationary pressures. This increase in buyer activity is the pent-up demand from homebuyers who are now moving forward with plans they had previously postponed due to last year’s economic uncertainties.

Low inflation boosts buyer confidence

The inflation rate in the UK has dropped to 2.3%, the lowest in nearly three years, and the economy is emerging from a brief, shallow recession.

With a strengthening job market and potential interest rate cuts expected by summer, pressure on household incomes is easing, improving affordability. Nevertheless, the housing market remains sensitive to price changes.

Fastest economic growth since Q4 2021

According to the Office for National Statistics (ONS), the UK economy experienced its fastest growth in nearly three years during the first quarter of 2024. The Gross Domestic Product (GDP) increased by 0.6% in the three months leading up to March, marking the strongest growth since the fourth quarter of 2021.

Increase in property stock

In light of this positive economic news, we at Benham & Reeves are observing an increase in the number of sellers listing their homes, providing more options for buyers and enhancing market activity. This trend is likely to accelerate once the Bank of England slashes its interest rates.

Although the housing market remains challenging, our current position is significantly better than it was a year ago, and we anticipate more stability in the coming months. According to Rightmove, the average price of UK properties for sale has hit a record £375,131, with the number of sales agreed in the first four months of 2024 rising by 17% compared to last year. Zoopla also reported a 20% increase in properties for sale compared to spring 2023 and a 9% year-on-year rise in agreed sales.

As we await the outcome of the General Election on 4th July, many analysts suggest it will have minimal impact on the housing market, with interest rates and broader economic factors playing a more significant role.

Robust rental demand continues

Demand for rental properties in London remains strong, although inquiries have dipped slightly compared to last year. According to Rightmove, the number of people searching for rental homes in London is 17% lower than last year but still 54% higher than in 2019. They estimate that approximately 50,000 rental properties are needed to restore availability to pre-pandemic levels. Zoopla reports that the average rent in London has risen to £2,121 per month, reflecting a 4.2% increase over the past year.

Quicker lets for well-presented rental properties

At Benham’s, we are receiving approximately 15 inquiries per rental property. Well-presented and accurately priced properties typically rent out within one to two weeks, keeping vacancy periods minimal.

For our buyers and investors in Singapore looking to reap the benefits of investing in a London property, we have a special preview of an exciting new riverside development, Wandsworth Mills in South West London coming up this month, for which you can register now and book an appointment. We also have many more brand-new properties across several exciting new-build developments for sale in London. If you have a query or need more information about investing in the UK capital, get in touch with us today!