The first Bank of England rate cut for four years has led to an immediate upturn in buyer activity, according to the latest Rightmove HPI.
The latest data shows the number of potential buyers contacting estate agents about homes for sale has jumped from 11% up on the prior year across the month of July, to 19% up since the 1st of August compared to the same time a year ago
Rightmove has 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 is now 16% ahead of the near-peak-mortgage-rate period of a year ago and the number of new sellers coming to market is 5% ahead of last year as confidence to move grows
Average new seller asking prices see a seasonal drop of 1.5% (-£5,708) this month to £367,785. August has seen a monthly decline in prices from July for the last 18 years, with this month’s fall in line with the long-term average.
Commenting on the latest figures Rightmove’s director of property science Tim Bannister 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.”
He added: “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.”
Together director of sales Tanya Elmaz agreed that the earlier than expected rate cut had definitely given a welcome boost to the mortgage market. “We have seen the largest mortgage lenders cutting their rates and adding some competitiveness to the sector, which will provide confidence to consumers looking to purchase property or refinance now.”
Propertymark chief executive Nathan Emerson also saw reasons for optimism: “What the housing market urgently needs is a confidence boost following three years in 2020-23 of economic disruption. If inflation continue falls next month, it would be positive for the Bank of England to use this as an opportunity to cut interest rates further, especially as the recent cut in interest rates spurred some activity in the housing market.”
“Additionally now that the new UK government has had a month in power, they should implement their Planning and Infrastructure Bill to liberalise the planning system and deliver those millions of new homes the country desperately needs while protecting the greenbelt.”
