What does the housing market look like this autumn?

After the tumultuous few years the housing market has been through, buyers and sellers have been anxiously waiting to see how their policies might affect the housing market going forward. The good news is that there seems to already be signs of positive change for both buyers and sellers, and indication that this will continue for the foreseeable future. To examine this in more detail, we will delve into the change in mortgage rates recently, how house prices have altered and what the housing market looks like going forwards.

Mortgage rates

Mortgage rates have dropped at last! After 11 months of a base rate of 5.25%, the base rate has finally lowered to 5%. This is the first cut in 4 years. The reduction has been giving a renewed confidence for households and businesses, and the housing market is on track for 10% more homeowners moving compared to last year. There is also renewed competition between the lenders, offering significantly cheaper rates, particularly for prospective buyers with larger deposits or more equity. Affordability is such a significant factor in the current economic climate, and mortgage rates becoming a more manageable cost is breathing life back into the housing market, with a 16% upsurge in sales agreed in comparison to last year.

House prices

The lowering of mortgage rates has certainly led to a greater interest for purchasing property. According to Rightmove, the number of potential buyers getting in contact with estate agents to look to buy a home has had a 19% uptake this month in comparison to August of last year. Whilst Zoopla’s most recent house pricing index has stated that buyers are now paying a greater proportion of the property asking price on average, at 96.8%, the highest it’s been in 18 months.

Though there is an increase UK housing prices, this is quite steady so far after a fairly flat year. Since the drop in 2023, there has been an 0.1% average rise in the last year. However, Richard Donnell, the executive director of research at Zoopla, states in the house pricing index that a sharp rise in inflation would be unwelcome for buyers and sellers in the current climate. This is because affordability remains a major constraint on the market, particularly in southern England. Whilst a modest inflation in house prices is positive in giving sellers the confidence to list their properties.

What does this all mean for the foreseeable future?

The question on everyone’s minds is how significant are these new developments in substantially improving the housing market? As the market adjusts to lower mortgage rates and steadily increasing house prices, this should infuse buyers and sellers with a confidence that this will only continue to improve further over the next few months. Although the decreases in the mortgage base rates and the increase in house prices are not huge, they are still a major turning point from the state of the housing market in 2023, and are a clear indication of the direction the market is travelling in.

If you are looking to sell your property or buy your next home, contact your local branch and one of our property experts can advise you.