Around 40% of UK house hunters are set to accelerate their purchasing plans, with many fearing prices are more likely to climb than fall. This is according to Bloomberg Intelligence’s latest UK homebuying survey,
Bloomberg Intelligence senior real estate analyst Iwona Hovenko said that the easing of mortgage rates from 2023 highs was helping to revive UK housing activity, with the Bloomberg survey suggesting 41.5% of the country’s prospective buyers are accelerating their plans compared to 35% in mid-2023 and 31.2% in October 2022.
Fewer respondents claimed to be pausing or significantly postponing their moves – down to 8.5% in February from about 13% in the summer of last year and Q4 2022.
Buyers’ expectation that property values will increase in 2024 could support UK house-price growth, Bloomberg argues, with a higher share of survey respondents citing climbing house prices as the primary reason for accelerating their homebuying plans.
Even among those postponing or pausing moves, a much smaller proportion is doing so in the hope of values decreasing, according to the research.
The sentiment shift among UK homebuyers may become a self-fulfilling prophecy, with house hunters believing prices are more likely to go up than down. The fear of being priced out of the market if they delay has already prompted some to act.
Despite the increasing optimism among UK homebuyers, high mortgage rates remain a key obstacle, forcing some to delay or pause their plans. Poor mortgage affordability and elevated valuations – amid a very modest decline from the peak – could contain any house-price growth, Bloomberg says.
That likely means homebuilders and secondary-market sellers (responsible for about 85% of UK residential-property transactions) may need to tread carefully and avoid overpricing. A small proportion of respondents said they were convinced that valuations might fall.
Hovenko commented: “Calls for legislation supporting longer-term mortgage-rate fixes – which would aid the housing market and insulate homeowners from interest-rate fluctuations – could be met with a lukewarm reception from UK buyers, our survey suggests”.
She added: “Only 7.6% of respondents preferred 10-year fixed-rate mortgages, down from 8.3% in mid-2023 and 9.1% in October 2022. The high cost and limited flexibility might be the primary hurdles, especially given nearing rate cuts.”
