The UK housing market has enjoyed a boost in activity following the recent decision by the Bank of England to cut interest rates, says property website Rightmove.
Their latest HPI shows that compared to the same period last year, estate agents have reported a 19% rise in enquiries about properties for sale after 1 August.
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.”
Data taken from the research reveals that although high rates slowed the housing market in 2023, August’s figures will still strong and came after July saw an 11% rise in enquiries.
The average interest rate on a five-year fixed-rate mortgage fell now stood at 4.8%, down from 5.82% when the BoE raised rates to 5.25% last year.
Between July 7 and August 10, average asking prices fell by 15% to £367,785 – equivalent to a £5,708 monthly drop.
Nathan Emerson, chief executive of estate agent body Propertymark, said: "What the housing market urgently needs is a confidence boost following three years in 2020-23 of economic disruption.
"If inflation continues to fall 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."
Rightmove also said it had revised its house price forecast for the year, and now predicts they will rise by 1% due to "positive market data and trends compared to the much more subdued 2023".
