The average price of property coming to the market for sale sees a seasonal drop of 1.5 per cent this month (-£5,708) to £367,785. New seller 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.
The distractions of school summer holidays traditionally bring a dip in prices, as some buyers put their home-moving plans on hold to enjoy holidays or time with family. This also means that new sellers who do come to market at this quieter time of year may have a pressing need to sell, which means they tend to price more competitively.
However, summer sellers this year may find that there is a degree of buyer buzz around the market that was missing in the peak-mortgage-rate market at this time last year. As anticipated in Rightmove’s July report, 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 per cent rise in new seller asking prices.
Nathan Emerson, CEO of Propertymark, comments:
“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.”
Since the Bank Rate cut on the 1st of August, the number of potential buyers contacting estate agents to view homes for sale is 19 per cent higher than in the same period a year ago. This comparison is with a very subdued period in 2023, when the market was dealing with the fallout of unexpectedly high inflation figures and peak mortgage interest rates. However, this improvement in the buyer demand trend from +11 per cent across the month of July shows the immediate and strong impact of the first Bank Rate cut since 2020. Agents report that increased political certainty and the improving economic outlook is also helping with buyer interest.
The positive impact of the Bank Rate cut, combined with other encouraging market data, has led Rightmove to revise its end-of-year price prediction upwards — from a one per cent drop in new seller asking prices over the whole of 2024, to a one per cent rise over the year. We expect small price rises in the autumn, followed by the usual seasonal monthly falls in prices at the end of the year. Though there are still some uncertainties ahead – October’s Budget, the timing of a second Bank Rate cut, and the US economy to name just three – the scene is now set for a positive remainder of the year. The number of sales being agreed between buyers and sellers continues to track very positively at 16 per cent ahead of last year, and the number of new sellers coming to market is now a stable five per cent ahead of this time last year.
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 per cent, which though still high compared with three years ago, before the first of 14 consecutive Bank Rate increases, is an improvement from 5.82 per cent at this time in 2023. Rightmove’s weekly mortgage tracker shows that the best available 5-year fixed rate is now 3.83 per cent for those with a 40 per cent deposit, the lowest that a five-year fixed rate has been since the period before the mini-Budget in September 2022.
Tim Bannister Rightmove’s Director of Property Science said: “Although it will likely take a few more cuts to the Bank Rate for home-movers to see a more substantial reduction in mortgage rates, it’s home-mover sentiment that has immediately been heightened. Buyers and sellers are more optimistic about the outlook for the market, evidenced by the immediate upturn that we’ve seen in activity. However, though optimism around the direction of mortgage rates is justified, the reality is that they are still very high compared with a few years ago, and there will be some who need rates to drop further before their affordability is notably improved. Buyers are still stretched, and so sellers mustn’t get too carried away by the higher buyer activity levels compared with last year, and continue to come to market with a competitive price.”
Gareth Overton, Head of Residential Sales at Henry Adams said:“The summer property market has remained fairly active, with increased stability providing a solid foundation for continued strong sales based on buyer confidence. The much-anticipated election outcome caused few ripples, with only a slight dip in viewings as the holiday season began. However, as the Autumn Budget approaches, we may see more significant changes, particularly among buy-to-let landlords who are closely monitoring potential capital gains tax implications. In areas such as Chichester, Midhurst and Bognor Regis, the current sales market is particularly active and we have seen a noticeable increase in enquiries from downsizers across the board. While August is generally a slightly quieter month due to the holiday season, the market continues to show resilience and is ticking over steadily. The Bank of England Base Rate appears to have had a positive impact on home-mover sentiment. Underlying demand remains positive and we expect activity to gather pace in line with the traditional seasonal fluctuations as we move into the autumn months.”
Gary Hamilton, founder of Bohome Estate Agents in Hamiltonsaid:“July was a strong month for us, reflecting the resilience of our market. We’ve seen a mix of outcomes, with some properties achieving well above the expected price whereas others sold closer to it. This underscores how crucial it is for sellers to set realistic and competitive prices in today’s market, as getting the price right is key to attracting strong buyer interest. With schools returning and routines normalising, we expect activity to pick up further in the coming weeks. The stability we’ve observed in July positions us well for continued growth into the Autumn.”
Josephine Ashby, Managing Partner at John Bray Estate Agents in Cornwall said:“The market in North Cornwall is warming up nicely to coincide with the long overdue return of sunshine. There is no doubt that activity slowed in the build-up to the general election despite a result that was no great surprise to the country. With the election now behind us we are seeing an improvement in buyer engagement as more certainty in the political and economic landscapes forms. There is a substantial increase in properties for sale across the area giving buyers an extremely good level of choice and time to reflect on the best opportunities. There are some spectacular instructions available, some representing true ‘once in a lifetime’ opportunities so focussed buyers who know what they want can really find something very special.”
The NHS (89 per cent), cost of living (88 per cent) and the economy (68 per cent) remain the most commonly reported issues when adults are asked about the important issues facing the UK today. These are followed by housing (60 per cent), crime (59 per cent), climate change and the environment (58 per cent). However, there are some significant differences in views by age and sex.
Just over half (54 per cent) of adults reported their cost of living had stayed the same in the past month and 45 per cent said that it had increased.
