The housing market remained surprisingly resilient in December, with buyer sentiment continuing to be strong with 71% of UK buyers confident they would purchase a property within the next three months, consistent with November.
Although vendors can become gloomy at this time of year if their property has not sold ahead of the New Year, more than half – 55% – of sellers remained confident that they would sell within three months, only one percentage point lower than the previous month, according to fresh data provided by OnTheMarket.
Regionally, sentiment among buyers remained fairly consistent. However, there were significant variations in seller sentiment, highlighting that the market is made up of many local markets which operate independently from one another.
Seller confidence saw a seven percentage-point increase in Scotland in December (68% compared with 61% in November), compared with a 7 percentage-point decrease in Wales (51% in December compared with 58% in November).
OTM’s Jason Tebb said: “The biggest variation was in London, which saw a 15 percentage-point decrease in seller confidence to 51% (compared to 66% in November). This may just be a Christmas blip, however, as our numbers (at the time of writing) for January 2024 suggest that seller confidence has picked up again. Anecdotally, some London agents are reporting that vendors whose properties had been on the market for a few months became less confident about their chances of finding a buyer as activity dipped in December.
“On the mortgage front, 8% of movers were either very worried or slightly concerned about getting a loan in December, unchanged from November. This suggests borrowers have become more relaxed about the outlook for lending after three consecutive holds in base rate seem to indicate that the painful increases are over and that the next move by the Bank of England may be downwards. The reduction in Swap rates, which underpin the pricing of fixed-rate mortgages, has enabled lenders to reduce rates accordingly, resulting in a welcome return of sub-4 per cent five-year fixes, among other cheaper deals.
“Although we might have expected a December dip in confidence, the data tells a different story. Those who forecasted a significant, double-digit drop in house prices may be proven wrong. Challenging macroeconomic conditions mean property prices are off their peak but that’s not necessarily a bad thing for the overall health of the market and will bring some cheer for first time buyers. Buyers who have been waiting to return to the market may well decide to get on with it, rather than continuing to put plans on hold. Although there will be a general election this year, many have already factored in a potential change of government and rather than worrying about what may or may not happen, are getting on with their own lives and taking advantage of more competitive mortgage rates.”