London estate agent Foxtons says house sale demand in the capital has picked up in recent weeks as mortgage rates “normalise”, while rents will “remain at historically elevated levels” throughout 2024.

The firm adds that its house sales division enters the year “with an under-offer pipeline significantly ahead of the prior year despite weaker market conditions, which should support a good level of year-on-year revenue growth in the first quarter,” in a trading update on the London Stock Exchange.  

It points out: “Buyer demand has grown as mortgage rates have begun to normalise, with good levels of growth seen in recent weeks as the first mortgage products are released with rates below 4% since the September 2022 mini-budget.   

“Any sustained reduction in interest rates is expected to spur significant further growth in buyer demand.”   

Earlier this week, Nationwide Building Society cut selected residential rates by up to 81 basis points, with its lowest prices starting at 3.84% — the lender’s lowest level in eight months.    

The base rate was held at a 15-year high of 5.25% in November for the third time in a row as the Bank of England bids to bring inflation back under its 2% target, currently at 4%. The BoE’s Monetary Policy Committee is widely expected to again hold the base rate next Thursday.   

Foxtons also expects rents to remain “resilient” throughout 2024,  

It says: “As lettings supply and demand dynamics have largely normalised, rents are expected to stabilise and remain at historically elevated levels, whilst improvement in the supply of available rental properties provides a good opportunity to deliver further market share growth.”  

The business says adjusted operating profit for last year was “broadly flat” at around £14m compared to the previous 12 months, while revenue was up 5% to £147m.  

It adds that lettings, which represent around 70% of group sales, grew by around 16% delivering over £100m revenue for the first time in the company’s history.