Now we are officially in autumn the news is official. The new season has seen an early surge in the housing market, and everyone is crossing their fingers that the boost will continue and that the demand that has been building for so long can finally be released.
In our last blog, we saw how the latest House Price Index from Rightmove showed that average asking prices had risen by 0.8% in September on the previous month and by 1.2% over the year. The September growth was double the long-term average for the period and was prompted by increased activity in the market.
Base rate cuts are fueling activity
Such growth has been fueled by the base rate cut in August, the first cut in four years and following almost 12 months of the base rate held at 5.25%. September saw the Monetary Policy Committee hold rates steady at 5% for a second month but a further 0.25 percentage point cut at November’s meeting is anticipated by economists.
The Rightmove figures have been supported by the latest figures from HMRC, released at the end of September. They showed provisional non-seasonally adjusted estimates of UK residential transactions at 104,330 in August 2024. This figure is 10% higher than the same month last year and 8% higher than the previous month. Seasonally adjusted estimates show a 5% year-on-year rise to 90,210.
Buyer and seller interest is rising
Buyers are clearly now more confident to buy, especially with a further base rate cut by the Monetary Policy Committee expected before the end of the year. Some economists even believe a further cut will take place in December’s announcement.
Rightmove’s figures meanwhile showed that there was an increase of 14% in the number of new sellers coming to the market and a 15% increase in interested buyers contacting estate agents. The number of agreed sales between buyers and sellers increased by 27% on the previous year.
Will autumn cool?
The figures and prospects for the start of autumn are encouraging and lenders have also been buoyed by the news with mortgage rates continuing to fall as swap rates also decrease. The beginning of October saw First Direct announce deals starting at 3.79% on a five-year fix for owners and first-time buyers who have a deposit of at least 40%.
However, some buyers and sellers may be waiting not only for a second base rate cut but also for the details of Labour’s first budget since coming to power which will take place at the end of this month. It will be a few weeks yet before we know whether the early surge is likely to maintain its pace, but the signs are that the market is going in the right direction and that confidence is returning.