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Simon Hollands reflects on the last year and while he doesn't have a crystal ball, he is optimistic about 2024!

2023 was an interesting year for the local property market. Following the controversial ‘Truss budget’ of September 2022 there was an immediate, knee jerk reaction from mortgage lenders which resulted in many deals being completely withdrawn or a dramatic increase in lending rates. The consequence was that many sales collapsed as buyers contracted a severe dose of cold feet.

Yet (thankfully) industry fears of a property crash were unfounded. While a modest fall in property values ensued during the early months of 2023, the biggest impact on the market was the reduction in the number of transactions. First time buyers were deterred by the increased costs of borrowing and the limited incentive to buy as prices softened. Most moves were restricted to those out of necessity.

Our own local experience was that house values slipped by around 5% through the calendar year. Put into perspective, though, this merely cancelled out the gains of the previous twelve months. Commentators would summarise this as an ‘adjustment’ as opposed to a ‘crash’.

The supply of available properties remained fairly constant. Most Agency’s registers of available property grew and motivated buyers had the rare privilege of choice. The classic market forces of supply/demand had their way and values slipped for the first time since the Covid lockdown.

As we approached the end of the year, buyer enquiries began to grow. While many enquiries didn’t develop into viewings or offers, it was apparent that more ‘window shoppers’ were about. The sense of a pent-up demand was increasing.

This has spilled over into 2024. Fuelled by lenders offering more attractive mortgage deals, the early signs for the market are encouraging. Many buyers will continue to delay in the hope that rates will fall further but current market conditions would not appear to support further falls in values.

The housing market remains ‘lender driven’ and confidence is key - fears of buying a diminishing asset are reducing. The moment lending rates become sufficiently attractive for borrowers to jump in, many will do so. It’s uncertain whether that moment is now but the sense is that we’re not far away.

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