Will we see a ‘Spring bounce’ in the property market this year?

Although, in the current market, the possibility of seeing one in 2023 has been the subject of debate in recent weeks.

Of course, it is not simply a change in the weather and lengthening days that encourage favourable market conditions.

The opening months of the year are often used to reflect and plan for the future; property investors investigate their financial planning and consolidation options.

Once budgets are hashed out, April to July then tends to bring a more active, fruitful period for buyers.

Insight from national estate agent Jackson-Stops — using Land Registry data from the past decade — suggests property transactions tend to inflate by 28% in March when compared to the monthly average across the rest of the year (excluding the pandemic years).

So, will we experience a ‘Spring bounce’ in 2023?

Economic challenges remain – but so do opportunities

While the current macroeconomic conditions do present a challenge, they also create an opportunity for property investors.

Inflation is falling, but remains in double figures (10.1%), while the Bank of England (BoE) has consistently increased interest rates since December 2021.

As to be expected – this has suppressed demand and borrowing capacity for many.

This has led to a slight decline in average house prices in the initial months of the year and bargains may be pounced on as the weather improves.

Truthfully though, it will be hard to tell if there was a Spring bounce until after a few months have passed.

Regardless of whether we saw a rise in March, the property market's medium- to long-term outlook looks promising.

The market is stabilising

Signs suggest the property market is stabilising — any negative data could simply represent a blip in the continued success of the UK property market.

Many likely still have bad memories of Liz Truss’ and Kwasi Kwarteng’s mini-Budget last September.

The ill-fated economic announcements threw the financial markets into turbulence, reduced investor confidence, and sent the pound plummeting.

If we compare that period of turmoil with the past few months, it is easy to see that some semblance of stability and normality has returned.

The actions of Rishi Sunak and Jeremy Hunt seem to have imbued a sense of calm — boosting investor confidence as a result and opening up the possibility of a property market bounce back.

Some economists, commentators and BoE policymakers believe that inflation has peaked.

The likelihood for interest rate pauses — or even cuts towards the end of the year — has risen. 

This should deliver further investor confidence in the months ahead and boost activity levels further.

The more stable the wider economy is, the more that buyers, borrowers and their brokers can plan ahead with confidence.