The number of prospective buyers contacting agents increased in the first two weeks of the year, as stability returned to the property market.
Falling mortgage rates and a return to stability across the market have resulted in a welcome boost in property enquiries at the beginning of the year.
The number of prospective buyers contacting agents climbed 4% in the first two weeks of 2023 compared with the same period in 2019 and is up 55% compared with the fortnight leading up to Christmas, according to Rightmove data.
This represents the biggest new year bounce since 2016. Asking prices rose 0.9%, the biggest increase at this time of year since 2020.
The figures come as mortgage rates have started to fall from the highs of 6% + that were seen towards the end of 2022. The most competitive five-year fixed rate available at the time of writing this article sat at 4.2%, while a November update from the Office for Budget Responsibility suggests the average mortgage rate paid by homeowners could sit at 4.6% as far out as 2027.
Commenting on the figures, Knight Frank Finance partner, Ben Sheriff, said: “At the end of year, we certainly saw less demand for new purchase mortgages but coming into January it feels like there is some pent-up activity coming back to the market.”
Sheriff said clients are much more willing to accept where rates have settled, adding that “general sentiment and that the feeling of initial shock when talking about additional or increased costs seems to have subsided, with people now more comfortable in taking a rate that's probably going to be in the fours.”
He added that though the fall and stabilisation in fixed rates was good news for the market, other products could be more appealing for certain clients. As a result, he said clients were increasingly willing to explore different products that would not have been considered previously.
“Bank of England tracker mortgages, for example, or lender discounted rates where the rate is discounted from the lender’s own house rate have become more popular again. So, we’re certainly starting to look at more interesting product mixes for clients, who would have previously opted for a five year-fixed rate.”
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