Seller Confidence on the Rise in UK Property Market

Research indicates seller confidence is rising as the typically bustling Spring market approaches, coupled with anticipated interest rate reductions in the coming months.

According to OnTheMarket’s most recent Property Sentiment Index, 60% of sellers in the UK expressed confidence in selling their properties within the next three months in February, marking an increase from 57% in January. Concurrently, 65% of active buyers maintained confidence in purchasing a property within the same timeframe.

Find Out More: If you’re looking for more information on buying a rental property, consider our guide on the best place to invest in property in the UK.

So, why is seller sentiment on the rise?

We need to look at the 2023 property market to answer this question.

Many buyers were priced out of the market due to high inflation (following COVID-19, European conflict, and the mini-budget fiasco). When inflation is high, the Bank of England raises interest rates to put people off borrowing. This led to increased mortgage rates, which made buying a house more difficult in the short term. With buyer activity low, more people moved into the rental market, which pushed rent prices up. Learn more about what a good rental yield is with our useful property guide.

With rental prices expected to grow by 6% this year (per Savills), buyers are resuming their property investment strategies. Inflation has fallen to 4%, while interest rates have held at 5.25% since the summer of 2023. As a result, mortgage lenders have reduced their rates significantly. While the cost of borrowing remains elevated, it is much more affordable than last year, prompting buy-to-let investors to consider buying investment properties again.

Further Reading: Learn how to buy more than one property with our page on how to grow a property portfolio.