The UK property market witnesses a shift as mortgage rates decline, attracting more buyers and stabilising house prices.
- Data from Rightmove shows estate agents in Britain are marketing an average of 63 homes, a notable increase compared to previous years.
- The increased housing stock is reducing price pressures, allowing buyers more negotiating power.
- Mortgages have become more affordable, with the average five-year fixed rate dropping from its peak, encouraging market activity.
- Optimism for future market recovery is growing, with expectations of further improvements in affordability.
Data reveals a significant improvement in housing availability across the UK, with estate agents now listing an average of 63 homes. This marks a considerable rise compared to the scarcity experienced during the pandemic’s “race for space.” The situation back then, marked by heightened demand and stamp duty holidays, resulted in notably higher house prices. Today, increased stock is providing buyers with greater leverage, slowing down the previous rapid price growth.
In October, Rightmove reported the average asking price for new listings rose by only 0.3% to £371,958, a stark contrast to the typical 1.3% surge seen in the autumn months. Tim Bannister of Rightmove highlights that with abundant options, sellers must competitively price their properties to attract buyers, especially given current affordability challenges.
The uptick in property listings is largely propelled by declining mortgage rates, encouraging more potential buyers to enter the market. The average five-year fixed mortgage rate has seen a decrease to 4.6% from a peak of 6.1% earlier in the year, making home purchases more accessible. This shift has resulted in a 29% increase in agreed sales and a 17% rise in buyer inquiries, indicating a recovering market after a period of stagnation dictated by rising mortgage costs.
This positive trend is mirrored in housebuilders’ reports of increased sales, with estate agents remaining hopeful about the housing market’s future. Rightmove’s data reflects a 1% annual increase in asking prices, with mid-market properties experiencing the most significant gains. In contrast, larger homes have seen slight price declines, possibly due to prospective buyers’ hesitancy amidst uncertain fiscal policies.
Despite lingering uncertainties, there is a sense of guarded optimism for 2025, where further interest rate cuts and wage growth outpacing house price inflation could enhance affordability. Bannister foresees renewed market enthusiasm, similar to past surges, contingent on the economic clarity expected post the upcoming budget.
The UK’s housing market is showing signs of recovery as mortgage rates drop and buyer activity increases, leading to a more balanced property market.
