Onward and Upward: Assessing Homebuyer Drive in 2024:

Despite inflation figures surpassing expectations, the anticipation of interest rate cuts later this year adds to the positive outlook.

Unveiling Strong Commitment:

A recent survey, encompassing over 1,400 prospective buyers and sellers, concluded at the end of December 2023 has brought forth compelling insights. The commitment to moving homes stands at its highest level in over a year, with a net balance of +30%. This marks a significant rise from +14% recorded in July 2023. Notably, this surge is particularly prominent among debt-dependent buyers, riding on the decreasing mortgage rates that open avenues for lower borrowing costs.

Motivations for 2024 Moves:

Respondents were asked why 2024 seemed opportune for a house move. A majority (57%) expressed a simple desire to "get on with life." Another 31% perceived improved affordability or sensed that house prices were stabilising, while 12% favoured property investment over alternative financial avenues. This sentiment aligns with recent RICS data (December), indicating that new buyer inquiries are at their highest since April 2022.

Understanding Motivations:

Delving into specific motivations behind moving, first-time buyers cited self-saved deposits (32%) and a preference to invest in their own home rather than continue renting (26%). Downsizers, on the other hand, predominantly sought smaller homes to suit their needs (47%), with 15% aiming to release equity for retirement and 12% desiring proximity to local amenities and transport.

Steady Budgets and Financial Strategies:

Despite market dynamics, most prospective buyers are maintaining their budgets. When asked about changes compared to three months ago, only 14% were reducing budgets, while an almost equal number were looking to spend more. A noteworthy segment (one in eight) plans to reduce borrowing without impacting their budget, opting to increase cash or equity usage. Cash transactions made up 43% of deals in 2023, exceeding pre-pandemic levels of 35%.

Market Projections for 2024:

The average UK house price is expected to experience a modest decline of -3.0% in 2024, affirming the belief that the housing market has weathered its toughest phase. Prime markets, constituting the top 5-10% by value, are poised for a quicker recovery due to reduced reliance on borrowing. Prime central London, anticipating no price falls, is expected to lead the recovery, while prime regional markets may see a marginal decline of just -1.5%.

In summary, the signs point towards 2024 as an opportune time for those contemplating a move.

Written by Veera Josey, 14th January 2024