Property Market Summary Q4 2023

Market Analysis and Projections for 2024

While the property market faced challenges in 2023, listings of three-bedroom homes rose modestly, suggesting evolving buyer preferences. However, sales agreed levels underperformed due to affordability issues stemming from high inflation and interest rates. Fewer transactions fell through and price reductions improved, signaling more realistic pricing and adequate time for buyer consideration. Listing durations and regional performance varied accordingly. Rural areas saw a minor price decline, potentially ending pandemic-fueled demand trends.

The real estate market stabilised in the fourth quarter after unpredictability as buyers and sellers adapted to higher interest rates. New listings were in line with historical norms, and motivated sellers still transacted despite anticipated 2023 difficulties. Three-bedroom properties comprised the largest share, followed by two and four-bedroom homes. Four-bedroom listings increased slightly while two-bedroom listings decreased, indicating segment trends.

Projections estimate approximately 25% more first quarter 2024 listings than fourth quarter 2023. Previous forecasts proved accurate, suggesting a stable year similar to 2023 with healthy new supply.

The most 2023 listings occurred on April 6, 2023, consistent with typical early April peak dates. Around 40% of 2023 listings have sold so far, 25% remain available. Price reductions declined 26% in November, likely balancing home prices. Early 2023 saw double 2022 reductions as seller and market expectations diverged. Now, reductions have decreased below 2022 levels, demonstrating improved first-time pricing accuracy.

Analysis shows 28% of properties with price cuts this year reduced prices multiple times, illustrating pricing challenges in balancing expectations and reality. Fourth quarter data implies reductions may stabilise in 2024 if pricing remains balanced, as hoped.

Fall-through rates in October improved considerably from 2021, decreasing to 26% from 39% previously. This suggests properties remain on the market longer, enabling thorough buyer consideration and fewer last-minute doubts signaling a sounder home buying process.

Over a third of sales falling through after the “mini-budget” reentered the market, but only a quarter succeeded. While not solely responsible, it accelerated shifts, with resulting mortgage rate changes having lingering reluctant impacts for some sellers.

2024 revenues are projected to increase 14% over the current quarter but still fall behind 2023 first quarter levels by 8% due to ongoing affordability issues.

Data highlights continuing affordability issues. Last quarter, homeowner mortgage arrears rose 18% while buy-to-let arrears doubled. Such constraints may cause difficulties for some landlords exiting the real estate market in 2024.

While 2024 may have started slowly, the market is anticipated to transition over the year as postponed buyers return accepting higher payments and smaller properties.

Leeds Property Market Update

Over the past year, the overall average price of properties in Leeds was £254,781.

During this period, semi-detached properties made up the majority of sales, with an average price of £254,101. Terraced properties sold for an average of £184,350, while detached properties averaged £475,261.

Overall, prices in Leeds over the past year were comparable to the previous year, and 4% higher than the 2021 peak of £245,538.

Most homes sold within the £150,000-£200,000 price range, with 1,452 sales (19.5% of the total). The next most active price range was £200,000-£250,000, with 1,258 home sales (16.9% of the total).

House Prices in Leeds Compared to England & Wales

A comparison of average yearly nominal house prices in Leeds versus overall prices in England and Wales.

Leeds House Prices and Nearby Areas

The average yearly nominal house prices in Leeds and surrounding areas.

Only time will show the true long-term impacts on landlords of fluctuating base interest rates and unpredictable costs.

For guidance navigating the West Yorkshire market, please contact our offices. We provide expertise and can help through your next local transaction as a first-time buyer, seller or investor. Contact us to learn more.

This analysis of UK market trends by Valor Properties is based on research but economic complexity means conclusions may change. Independent research is recommended before business decisions relying on this.

Bethany Nicol, March 2024