Landlords having enough of high taxes and endless red tape and deciding to sell will be able to take advantage of a “buyer buzz” in the market, reports Rightmove.
The portal’s latest house price index reports a seasonal drop of 1.5% this month (-£5,708) to an average £367,785. Asking prices have fallen in the month of August for the past 18 years, and the size of this month’s drop is in line with the long-term average.
Rightmove says new sellers who come to market at this quieter time of year may have a pressing need to sell, so tend to price more competitively. However, it suggests that summer sellers this year may find that t”here is a degree of buyer buzz around the market that was missing in the peak-mortgage-rate market at this time last year.”
The portal goes on: “The first Bank of England rate cut for four years at the start of the month has helped to accelerate mortgage rate drops and contributed significantly to improved buyer demand. These better conditions are helping to set up a positive autumn market, and a further spur to activity following the Bank Rate cut has led Rightmove to raise its 2024 forecast from a 1% drop over the whole of 2024 to a 1% rise in new seller asking prices.
Tim Bannister, Rightmove’s director of property science, says: “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.”
Since the Bank Rate cut on August 1, the number of potential buyers contacting agents to view homes for sale is 19% higher than in the same period a year ago.
Rightmove, which now has a financial services division too, says mortgage rates continue to head downwards and have picked up some pace in recent weeks.
The average five-year fixed mortgage rate is now 4.80%, which though still high compared with three years ago, before the first of 14 consecutive Bank Rate increases, is an improvement from 5.82% at this time in 2023. Rightmove’s weekly mortgage tracker shows that the best available 5-year fixed rate is now 3.83% for those with a 40% deposit, the lowest that a 5-year fixed rate has been since the period before the mini-Budget in September 2022.
