Ever since last year’s mini-budget sent shockwaves throughout the economy, the outlook for the UK property market has been unclear. Rising interest rates unsettled a market in which everybody had got very used to cheap mortgages, and triggered a decline in demand. A frenzy of speculation ensued: what would happen? Would prices fall? And if so, how far?

But now there are signs that things might be picking up. Results of the Royal Institute of Chartered Surveyors’ (RICS) Residential Survey in February 2023 show a new picture emerging. While new buyer enquiries are still down compared to last year, they are now up on last month, and last month’s figure was up on the previous month. In fact, last month showed the “least negative result since July of last year”. The survey also shows that while more than 60% of sales are being agreed at below asking price, they’re remaining within 5% of asking price. In terms of lettings, the RICS survey shows that the feared demand supply imbalance is unlikely to materialise, and that rents look likely to rise by more than 25% over the next five years.

This is a far cry from last year’s uncertainty. In London, Faith Cook of Winkworth’s Fulham office is experiencing a busy market. She says: “The houses on prime roads are still achieving strong prices and are proving to be popular. It’s key that properties present as well as they can do, more than ever at the moment, as first impressions are key and with buyers having heftier mortgage repayments along with a higher cost of living and building materials, they tend to be either looking for a property which is fully done with no work necessary, or a totally unmodernised property.” First time buyers are the ones struggling most with rising mortgage rates, she says, so while she is seeing fewer first timers, the ones she does see are serious. “There seems to be an adjustment with people getting used to the new mortgage rates which are most likely to become the new normal and with the cost of rentals having risen so much, buying is still a brilliant option,” she says.

Mortgage rates are still decreasing from their December highs, and deals of less than 4% are now common for those with large deposits. While this figure is significantly higher than a year ago, it’s a significant improvement on late 2022. Meanwhile, it’s important to remember that the average price of a UK home has nearly trebled since the turn of the century, and prices have increased by more than 60% over the last ten years. Clearly, property remains a sound investment.