New research has revealed that the UK property market has shown a marked resilience in 2023, with a robust performance in certain areas underscoring the sector’s adaptability and enduring appeal.
Rightmove’s year-end review takes a closer look at the trends and data that have shaped the property landscape over the past twelve months, offering valuable insights into the growing and retracting sectors for investors navigating the market.
Asking price adjustments
Average new seller asking prices experienced a dip of 1.9 per cent this month to £355,177, a steeper decline than the 20-year December average of 1.5 per cent. Rightmove suggests this seasonal adjustment is a strategic move by sellers aiming to stand out in a competitive buyer’s market.
Market resilience
Despite the larger-than-average price drop, the 2023 market has demonstrated resilience, with asking prices finishing the year just 1.1 per cent below last year’s figures. Sales agreed for the year are only 13 per cent lower than in 2022, a year characterised by exceptional market frenzy, suggesting a more balanced and stable environment is taking shape.
Regional performance
The market’s resilience is not uniformly distributed across the UK. Seven out of 11 regions have seen price increases, with the North West leading at a 1.5 per cent rise from last year, whereas the South East recorded the most significant decline of 3.7 per cent below 2022.
Return of family movers
Signs indicate a return of family movers, a demographic that has been waiting on the sidelines. With mortgage rates decreasing for 19 consecutive weeks – 5-year fixed rates now at 5.11 per cent versus the 6.11 per cent peak in July – this group is re-entering the market, encouraged by more stable conditions.
Buyer demand shifts
Buyer demand in the mid-market second-stepper sector is up by 9 per cent from last year, outperforming the general market’s increase of 6 per cent. This suggests that a particular focus on properties that cater to growing families could be a strategic move for investors.
2024 forecast investment strategy
The Rightmove projection for 2024 anticipates a national average asking price decrease of around 1 per cent, implying that sellers will need to remain competitive and investors should be discerning and strategic in their acquisitions.
Investment strategy
The current market conditions call for investors to remain agile, recognising the necessity for competitively priced properties to attract buyers. There’s an emphasis on realistic pricing from the outset to avoid price reductions later, aligning with buyer affordability challenges.
Tim Bannister, Rightmove’s Director of Property Science, commented: “With mortgage rates more settled and on a slow downward trend, potential movers who have been biding their time and waiting for calmer market conditions may decide to act in the early part of next year. Rightmove’s research and agent feedback is that the best strategy to sell in the current market is to price temptingly at the outset of marketing, rather than testing the waters with a higher price. This will hopefully avoid the need to reduce your asking price later.”
Looking ahead
With a general election on the horizon and the market settling into a new rhythm, Rightmove analysts predict that 2024 is poised to be a year where informed, realistic expectations will be key for both buyers and sellers. Prime areas, particularly coastal regions, continue to perform strongly, presenting the potential for targeted investments.
