Your Watford & Hertfordshire market report

During 2024, there has been never-ending speculation over when and how fast the base rate will come down. With inflation and wage growth proving more stubborn than expected and the economy bouncing in and out of recession, the outlook has been changing monthly. The money markets began the year by predicting a series of reductions from spring before switching to two in the summer, then just one in late autumn. Now it has changed all over again, with the Governor of the Bank of England, Andrew Bailey, hinting it might start coming down as soon as June and more quickly than anticipated.

There is no doubt that the ending of the base rate rises and an expectation of future reductions mean there is growing confidence in the housing market. However, the uncertainty over the exact timings has led to many sitting on the fence until more clarity. Others have reacted by targeting smaller properties and areas where their money goes further. Unsurprisingly, it has meant the market is currently going through a hiatus. Prices are relatively static, rising and falling each month but only by small margins, although activity levels have steadily improved.

April’s figures are typical of the current conditions - Rightmove reports that asking prices were up 1.1%, Nationwide that prices were down 0.4%, whereas Halifax says they were up by 0.1%. However, the number of new sellers coming to the market was up 12% compared to last year and agreed sales have risen by 13%. At the top end of the ladder, the numbers were significantly better with more cash buyers - new sellers were up by 18% and agreed sales by 20%. In contrast, in the mid-market sector, which is the largest, new listings were up by a more modest 10% and sales by 13%.

Market conditions could improve quickly when the base rate starts to come down. Matthew Marchant, Director of Sales, says:

“If, as is still expected, downward moves in Bank Rate come into play later this year, fixed mortgage rates should fall. Combined with the resilience displayed by the housing market over recent months, we expect property prices to rise modestly throughout 2024.”

Rental & Buy To Let Market

The rental market continues to cool, but only very slowly. As Tim Bannister, Rightmove’s Director of Property Science, says,

“It is no longer at peak boiling point but remains at a very hot simmer.”

The industry body Propertymark has just released some data that provides insight into the current conditions. According to their research, the average number of tenants registered per branch fell from 89 in February to 82 in March. At the same time, there was a minor increase in rental stock, with the average rising from just under 9 per branch to around 9.5. In addition, for the first time in a while, a few tenants reported their rent had fallen. Demand levels, though, remain very high, with nine new applicants registered for each available property.

Despite the generally softening trend, the latest data from Homelet’s rental index shows rents were up in April, rising by 1.6% to an average of £1,294 monthly. That’s an annual increase of 7.9%. In Greater London, rents jumped by as much as 3.1% to an average of £2,167 per month and by 8.2% annually. Even though affordability is becoming increasingly stretched, Propertymark’s report also revealed that rental arrears remain surprisingly low, with just 2.5% of the properties whose rents were collected by their member agents in arrears.

If you'd like to talk to an agent for more personalised advice, our team are always on hand to help. We'd love to hear from you, whether just a quick chat or a no-obligation property valuation.

Warm wishes,

The team at Rolstons.