- More London respondents keen to accelerate their home purchase
- High mortgage rates caused demand for homes to weaken in 2024
Almost half of UK house hunters are set to accelerate their purchase plans this year, with many fearing that prices are about to climb again, according to a survey.
Some 42% of wannabe homebuyers are speeding up their plans compared with 35% in mid-2023, the Bloomberg Intelligence study showed. In London — where homes are the most affordable they’ve been in almost a decade — the share of prospective buyers bringing their purchases forward is even higher at 47%.
“Buyers’ expectation that property values will increase in 2024 could support UK house-price growth,” BI analyst Iwona Hovenko wrote in a report. “The fear of being priced out of the market if they delay has already prompted some to act.”
Read more: London’s Sky-High Home Prices Are Most Affordable in Decade
UK households endured a tough 2023 as high interest rates and a cost-of-living squeeze sapped demand for new homes. That caused property values to decline, though fears of a full-blown crash failed to materialize as optimism grew over interest-rate cuts.
The survey is based on answers from 1,000 adult respondents belonging to the 25-68 age group with a minimum annual gross household income of £45,000 ($57,630). Conducted Feb. 7-10, the survey has a 5% margin of error.
Respondents from London cited the fear of house prices climbing as the primary reason behind accelerating their plans. Even among those postponing or pausing moves, a much smaller proportion is doing so in the hope of a decrease in valuations.
To be sure, while a steady reduction in mortgage costs since the summer eased the pressure on homebuyers, a recent uptick has kept prices at levels higher than Britons have been used to. Poor affordability could contain any house-price growth, according to BI, especially as the cost-of-living crisis plays out.
“Homebuilders and secondary-market sellers may need to tread carefully and avoid overpricing,” BI’s Hovenko wrote. Still, “though confidence remains fragile amid still-elevated rates, these trends suggest housing activity and prices may fare better than last year, supporting homebuilders’ fundamentals,” she added.
Original Post from : bloomberg.com
