With recent reports of declining housing market health disrupting the optimism of recent months, Rightmove’s latest house price index offers a more reassuring outlook. The largest monthly sample of residential property prices and housing market activity reports an 8% increase in the number of sales compared to the same period last year, with lower asking prices and high buyer choice contributing to higher than usual sales activity.
‘Savvy summer sellers have read the room and are coming to market with even more competitive pricing than usual to really stand out and attract serious and active buyers’, Rightmove’s property expert Colleen Babcock said.
“Astute buyers are now benefitting from new seller asking prices which are on average an enticing £10,000 cheaper than three months ago. Buyers have the upper hand in this high-supply market, so a tempting price is vital to agree a sale.”
The number of homes for sale is 10% up on last year, keeping the volume of homes for sale at a decade high. The number of new properties coming onto the market is 4% higher than the same period last year, which Rightmove believes could be an early sign of supply levels starting to reduce. The average price of a property coming to make fell by 1.3%, in line with the 10-year average following larger than usual falls in June and July.
With the recent Bank of England interest rate cut and the traditionally busier autumn period around the corner, conditions point to sustained demand, Babcock believes:
“Strong summer property sales as well as a stable level of new buyer demand bode well for the next couple of months.
“While we don’t expect the cut itself to spark major mortgage rate drops, it’s good for market sentiment and buyer optimism. Mortgage rates have been slowly trending downwards this year, and someone looking at the average home could expect to save over £100 a month on a new mortgage compared with last year.”
Steve Beercock, executive director at Beercocks in Yorkshire & The Humber, said August started ‘with some real momentum’, with a strong mid to high-end market and increased interest from buy-to-let investors. He added:
“Looking ahead, I expect September to be very strong. The recent drop in the Bank of England base rate is already stimulating activity. Mortgage colleagues have seen a marked increase in buyer enquiries in the past couple of weeks, and we are seeing exactly the same in our estate agency. With that combination of lower borrowing costs and motivated sellers who are pricing sensibly, the autumn market is shaping up to be busy and competitive.”
A similarly healthy level of activity has been seen in Richmond, with Amy Reynolds, head of sales at Antony Roberts, reporting a strong summer. She commented:
“July and August have both been busier than expected in Richmond, with strong agreed sales and very few fall-throughs. Realistic pricing from the outset is driving momentum, and well-presented homes – especially family houses in good school catchments – are attracting committed buyers. At the top end, stamp duty is a constant talking point. While the high cost is slowing some decisions, the desire for more space is still pushing people to commit.”
The rate cut has also been good news for affordability, with Rightmove’s daily mortgage tracker showing the average two-year fixed mortgage rate now 4.49%, compared with 5.17% at this time last year.
‘This equates to a saving of £117 per month for someone taking out a two-year fixed mortgage on the average home, based on having a 20% deposit and spreading the mortgage over 30 years’, the report notes. However, the company’s mortgage expert Matt Smith said the situation is unlikely to improve in the near future.
‘It was positive to see last week’s third Base Rate cut of the year, but the supporting commentary from the Bank of England suggests the opportunity for further cuts has narrowed’, he explained.
“The markets are currently forecasting one more cut before the end of the year. Lenders have moved their rates downwards to remain competitive, but there doesn’t look like much room for too many further reductions if current market forecasts play out. We could potentially see some lenders squeeze their margin to gain a competitive advantage, but I don’t think this would play out across the market and would likely target specific segments of movers.
“Overall, with further data to be releases and external events to play out, I think it’s likely rates will remain pretty much flat from here, with only small movements up or down.”
