The average price of property coming to the market for sale in August saw a seasonal drop of 1.5%, down to £367,785, data from Rightmove’s latest House Price Index has revealed.
The first Bank of England rate cut for four years also led to an immediate upturn in buyer activity, with the number of potential buyers contacting estate agents about homes for sale jumping from 11% to 19%.
Rightmove raised its 2024 forecast from -1% to +1% due to positive market data and trends compared to the much more subdued 2023.
The number of sales being agreed was 16% ahead of the near-peak-mortgage-rate period of a year ago, while the number of new sellers coming to market was 5% ahead of last year as confidence to move grows
Rightmove’s weekly mortgage tracker showed that the average 5-year fixed mortgage rate is now 4.80%, an improvement from 5.82% a year ago.
The best available 5-year fixed rate is 3.83% for those with a 40% deposit, the lowest a 5-year fixed rate has been since the period before the mini-Budget in September 2022
Tim Bannister, director of property science at Rightmove, said: “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 since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.
“As the summer holiday season comes to an end, the conditions are there for a more active autumn market.
“The reaction from home-movers to what is hopefully only the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price prediction for the year.
“We now expect new seller prices to rise marginally by 1% over the whole of 2024.
“This is a relatively small revision from our original prediction of a 1% fall in prices over the year, since we didn’t initially forecast anything more drastic than a slight drop in prices this year.”
Reaction:
Gareth Overton, head of residential sales at Henry Adams:
“The summer property market has remained fairly active, with increased stability providing a solid foundation for continued strong sales based on buyer confidence.
“The much-anticipated election outcome caused few ripples, with only a slight dip in viewings as the holiday season began.
“However, as the Autumn Budget approaches, we may see more significant changes, particularly among buy-to-let landlords who are closely monitoring potential capital gains tax implications.
“In areas such as Chichester, Midhurst and Bognor Regis, the current sales market is particularly active and we have seen a noticeable increase in enquiries from downsizers across the board.
“While August is generally a slightly quieter month due to the holiday season, the market continues to show resilience and is ticking over steadily.
“The Bank of England Base Rate appears to have had a positive impact on home-mover sentiment. Underlying demand remains positive and we expect activity to gather pace in line with the traditional seasonal fluctuations as we move into the autumn months.”
Gary Hamilton, founder of Bohome Estate Agents in Hamilton:
“July was a strong month for us, reflecting the resilience of our market.
“We’ve seen a mix of outcomes, with some properties achieving well above the expected price whereas others sold closer to it.
“This underscores how crucial it is for sellers to set realistic and competitive prices in today’s market, as getting the price right is key to attracting strong buyer interest.
“With schools returning and routines normalising, we expect activity to pick up further in the coming weeks.
“The stability we’ve observed in July positions us well for continued growth into the Autumn.”
Josephine Ashby, managing partner at John Bray Estate Agents in Cornwall:
“The market in North Cornwall is warming up nicely to coincide with the long overdue return of sunshine.
“There is no doubt that activity slowed in the build-up to the general election despite a result that was no great surprise to the country.
“With the election now behind us we are seeing an improvement in buyer engagement as more certainty in the political and economic landscapes forms.
“There is a substantial increase in properties for sale across the area giving buyers an extremely good level of choice and time to reflect on the best opportunities.
“There are some spectacular instructions available, some representing true ‘once in a lifetime’ opportunities so focused buyers who know what they want can really find something very special.”
Tomer Aboody, director of specialist lender MT Finance:
“Now that we’ve had the first interest rate cut in a few years, mortgages have followed suit, which has already led to more activity in the market.
“There has been an uptick in the number of buyers and sellers registering interest, keen to take advantage of lower mortgage rates.
“This, along with lower inflation numbers, has provided a positive outlook and feel-good factor for the market, bolstered by the hope of further rate reductions to come.
“However, there is a potential fly in the ointment with the new Chancellor’s October Budget on the horizon and a fear that higher taxes could result in that feel-good factor slipping away.
“Here’s hoping that isn’t the case and that there is some more positivity in the market for the final four months of the year.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“There is no doubt the cut in base rate has been a shot in the arm for the housing market, particularly in terms of new enquiries during the traditionally quiet summer period.
“However, the change was anticipated for such a long time so helped soften mortgage pricing on the high street. This meant the impact on property values has been modest to date.
“Of course, Rightmove’s asking prices are not selling prices but do reflect an important trend in seller aspiration and confidence.
“With so many buyers, sellers and others involved in the transaction process now on holiday, obtaining commitment to proceed has been tricky although we certainly expect momentum will return from early September.”
Chris Little, chief revenue officer at finova:
“Today’s news might reflect a slight dip in activity, but given the current economic climate, it is not entirely unexpected.
“The much-anticipated cut to the base rate has still enhanced activity, providing welcome relief for those battling affordability constraints.
“With further potential rate reductions on the cards, this period has created the perfect conditions for a mortgage price war, with high street heavyweights and specialist lenders alike announcing a string of rate reductions.
“Everything is to play for, and speed-to-market times will be decisive.
“The coming months will be a time of heated competition and lenders who harness technology to streamline property transactions will be in a strong position.
“Borrowers are spoilt for choice and will have little interest in jumping through the analogue hoops of outdated legacy systems. Investment into dynamic pricing engines early is primed to give lenders a competitive edge, simplify new product launches, and elevate the experience for borrowers, savers, and brokers.”
