Declining house prices but Rightmove anticipates a bustling autumn in the property market
The UK property market is experiencing a surge in activity, with a series of recent developments pointing towards a recovery.
The Bank of England made an interest rate cut in August, a move that is expected to boost buyer confidence in the property market. This decision, coupled with the slowing inflation and falling mortgage rates, is boosting buyer budgets, making it easier for them to afford homes.
The Halifax House Price Index (HPI) put the annual house price growth rate for July at 2.3%. This modest increase, although lower than the pre-pandemic levels, is a positive sign for the market. Rightmove, another leading property portal, has raised its forecast for asking price growth to 1% for this year, a significant shift from its previously predicted decline of 1%.
The number of sales being agreed is now 16% ahead of the near-peak-mortgage-rate period of a year ago. This increase in sales activity is reflected in the number of potential buyers contacting estate agents about homes for sale, which has jumped since the start of August.
The asking price of homes at the top of the ladder fell 2.3% to £665,492, while the asking price of a typical first-time buyer home fell 0.3% to £227,191. However, the average asking price for properties fell 1.5% between July and August, but rose 0.8% annually to £367,785.
Estate agency brand Knight Frank is more optimistic, predicting a 3% rise in sold prices, while Zoopla is predicting a 2% rise. Rightmove claims the property market is set for a busy autumn following the interest rate cut.
The U.S. Federal Reserve lowered its key interest rate for the first time since 2020 in August 2024 and suggested this could trigger a recovery in the real estate market, adding further optimism to the UK market.
The number of new sellers coming to market is 5% ahead of last year, indicating a growing supply of properties for sale. Mortgage pricing has declined since June, making it more affordable for buyers to secure a mortgage.
Typical asking prices fell across all types of properties between July and August, suggesting a broad-based correction in the market. Despite the current optimism, it's important to note that the property market can be volatile and subject to various economic factors. However, the recent trends suggest a more buoyant market for the remainder of the year.
