How positive was Q1 2023 for the UK property market?

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Q1 2023 has been a great three months for the UK property market. We’ve seen solid growth across the board, along with an ever-growing demand for rental property. Now more than ever, developers are needed to plug the gap created by a growing market of young professionals looking to move out of the family home.

Given the levels of positive growth across the UK property market, we thought it would be worth looking deeper into the results of Q1 2023.

The most recent Zoopla UK House Price Index data demonstrates that more fresh transactions are being agreed upon, and that buyers are returning to the market in larger numbers. The overall level of demand has risen to its highest point since October 2022, sitting 15% higher than it was at this time last year.

Overall, agreed sales are 10% higher than in 2019, and the number of available properties has climbed by 55% over the last 12 months. When seen as a whole, this is positive news for the market. Following the turmoil in the housing and mortgage markets during 2022, it represents optimism from those looking to buy property.

Average yearly growth in house prices is at 4.1%, and further growth is anticipated this year. Cities like Liverpool (6.1%) and Manchester (5.8%) surpass this as they continue to set the standard across the UK.

Savills' additional reports also contain positive news. Their analysis shows that despite how difficult it has been for many people to find an affordable mortgage; the number of first-time buyers is still 8% higher than the pre-covid average.

The amount of cash buyers is also 10% more now than it was prior to the pandemic, possibly as a result of the aforementioned mortgage problems. Cash purchases have particular advantages for those purchasing off-plan property since they allow them to purchase a home below market value and then build equity throughout the construction phase as the market continues to grow.

The rental side of the market has also made major inroads, and there is a lot of positive news for investors to celebrate. Returning to Zoopla, their March 2023 UK Rental Market Report reveals that, nationwide in the UK, rentals have increased by an average of 10% in the past year.

A stronger job market, issues with the mortgage market that have kept individuals renting longer than they otherwise would have, and an additional supply and demand imbalance that is pushing prices up are the causes of this.

Rightmove’s Director of Property Science Tim Bannister said: “Although the fierce competition among tenants to find a home is starting to ease, it is still double the level it was back in 2019. This is why we’re forecasting that the pace of annual growth will ease to around 5% by the end of the year nationally.”

Just three months after it was made, this prognosis already appears modest if rentals are currently 11% higher on average yearly. Not only are rents rising, but it appears that their rate of growth is accelerating.

It’s clear from these findings that the UK property market is continuing to see positive growth. If you’d like to know more about investing in the UK property market, speak to a member of the IPG team today.