It has been a strong start to the year for the sales market on the South Coast, with activity for the first 4 months showing to have been positive, when compared to 2023. We have seen an increase in demand from buyers which in turn has led to a rise in sales across the area.  

We believe the key reason for this is due to the reduction in mortgage rates, which finally came after several months of unaffordability meaning many buyers ‘held tight’ in the hope we would eventually see an improvement. For many this slight decrease was enough to entice them into the market, with the aim of securing a good deal before anything changes.  

With this increase in buyer demand we have also seen more stock coming to the market. Specifically on the south coast there is now 20% more property on the market for sale than this time last year. This good level of supply met with strong demand makes for a positive market and one that feels more stable compared to previous years.  

However, sellers should not make the mistake of seeing an increase in demand as an opportunity to also increase their asking prices. Price sensitivity is key, with those properties being priced ‘right’ receiving strong levels of interest and subsequently landing themselves an offer and increase in the commitment to proceed with the sale. 

Overall, there has been a real uplift in market confidence in Q1 2024 as a result of the mortgage market stablising and we are seeing sellers who had paused their plans until the market became steadier, now coming to the market. With affordability more favourable, there are more first-time buyers and upsizers re-entering the market, therefore we are expecting a continued buoyant market for the rest of 2024. 

With the Bank of England sitting on its hands again, borrowers will have to wait that bit longer for the first base rate cut since 2020. Inflation falling slower than expected has put the brakes on, with policymakers waiting for signs that the cost-of-living crisis has been shaken off - and there may be some way to go yet. Swap rates have also been choppy on BofE expectations, and it’s why some lenders have repriced in recent weeks.  

Nevertheless, the picture for the current mortgage market looks a lot more positive than for much of last year.  March saw an 18-month high in mortgage approvals, with new buyers pressing ahead with their plans. 

Despite evidence of unrest in the market, mortgage rates have stabilised, and we expect to see more confidence from buyers as the year continues. A third consecutive month of growth in the number of new buyers is great to see, as are the lower rates being offered to those looking to remortgage or buy their first home.

What we are seeing is the market finding its feet in a new higher interest rate environment which, although higher, remains low by historical levels. We expect inflation to continue falling, but also feel there may be small bumps along the way. The trend, however, should be gently downwards.  

While we thankfully aren’t in the same position as we were at the start of 2023, rates are higher than the levels homeowners fixed at two or three years ago, and repayments will still jump compared to what they have been paying. Current mortgage rates could be as good as they get, and therefore today’s new normal. There is little point in waiting for actual mortgage rates to fall much further, and therefore should feel decisive and act now if they are ready and wanting to do so. It’s all about seeing what’s out there. For those looking to get ahead, use the time before your product end date to get ‘mortgage ready’. Have a conversation with a broker - they will not only help you to find the most suitable deal but will also find out how much you can borrow towards your ideal next home, supporting you throughout the whole process.”