Rightmove’s August 2024 House Price Index
As we approach the end of summer, the UK housing market is showing notable shifts influenced by seasonal trends and recent economic developments. This August, new seller asking prices have experienced a typical seasonal dip, while recent changes in monetary policy have injected new energy into the market. Here's a detailed look at the current state of the real estate sector.
In August, the average asking price for new sellers fell by 1.5% to £367,785, which represents a decrease of £5,708. This decline aligns with the historical trend observed over the past 18 years, where August typically sees a reduction in property prices. The summer months, marked by school holidays and family vacations, often see a slowdown in the market as some buyers pause their home-moving plans. Consequently, sellers who list their properties during this quieter period may do so with more competitive pricing to attract buyers.
Impact of the Bank of England's Rate Cut
The recent cut in the Bank of England's base rate, the first in four years, has significantly influenced buyer activity. Since the rate cut on August 1st, the number of potential buyers contacting estate agents has surged by 19% compared to the same period last year. This increase follows a 11% rise observed in July, reflecting an immediate boost in market sentiment.
Rightmove has responded to these positive changes by adjusting its 2024 forecast. Initially predicting a 1% decline in new seller asking prices, Rightmove now anticipates a 1% rise in prices for the year. This revision reflects the enhanced buyer activity and improved market conditions.
Mortgage Rate Trends
Mortgage rates have also seen improvements following the Bank Rate cut. The average five-year fixed mortgage rate has decreased to 4.80%, down from 5.82% a year ago. Notably, the best available rate for a five-year fixed mortgage has dropped to 3.83% for those with a 40% deposit, the lowest since the mini-Budget of September 2022. This decline, while still not substantially low compared to historical norms, contributes to a more favorable environment for homebuyers.
Market Dynamics and Expert Opinions
According to Tim Bannister, Director of Property Science at Rightmove, "The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity. While mortgage rates aren’t yet substantially lower, the fact that the long-hoped-for first cut has finally arrived is positive for home-mover sentiment." The anticipated autumn market is expected to benefit from these improved conditions, with a potential uptick in activity as the holiday season concludes.
Experts across the sector are noting a resilient market. Gareth Overton from Henry Adams highlights that despite a traditionally quieter August, the market remains stable with increased buyer confidence. Similarly, Gary Hamilton of Bohome Estate Agents observes that the market is positioning well for autumn growth, emphasizing the importance of competitive pricing for sellers.
Josephine Ashby from John Bray Estate Agents in Cornwall notes that the political and economic uncertainties surrounding the recent general election have dissipated, leading to increased buyer engagement and a surge in available properties.
The UK real estate market is navigating a period of transition with seasonal price adjustments and the impacts of recent economic changes. The Bank of England's rate cut has provided a much-needed boost to buyer activity, and improved mortgage rates are enhancing market conditions. As we move into the autumn, the market is expected to benefit from these positive shifts, with a more active period anticipated following the summer lull.
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