The UK housing market is gearing up for a bustling autumn season, driven by a recent cut in interest rates by the Bank of England and a surge in property listings. According to a new report from property website Zoopla, the number of homes listed for sale has reached its highest level in seven years, a 14% increase compared to the same period last year.
This uptick in activity comes as the Bank of England, after raising rates to a 16-year high of 5.25% in an effort to curb inflation, made its first rate cut since the onset of the Covid-19 pandemic. The lower interest rates have encouraged both buyers and sellers to return to the market after nearly two years of stagnation caused by the previous high borrowing costs.
Zoopla predicts that the number of home sales will end 2024 about 10% higher than in 2023, thanks to the increased supply and renewed buyer interest. However, Richard Donnell, executive director at Zoopla, cautions sellers not to expect soaring prices amidst the flood of new listings. “With this level of supply, people have got to keep their feet on the ground on price,” Donnell advised, noting that affordability pressures, particularly in the wider South of England, could lead buyers to negotiate more aggressively.
Data from Zoopla highlights that around 20% of sellers have already reduced their asking prices by 5% or more, with these discounted properties taking over 2.5 times longer to sell than those at their original price. Despite this, house prices have remained relatively stable, with a 2.7% increase year-on-year to June, leaving the average UK property priced at £288,000.
Mortgage rates have also seen some relief, with the average five-year fixed-rate mortgage for those with a 25% deposit falling to 4.55%, down from 5.55% a year ago. However, rates are not expected to drop sharply, keeping buyers’ budgets under pressure. As Capital Economics notes, mortgage payments now account for 39% of the median full-time salary, up from 30% pre-pandemic, suggesting limited room for further increases in housing costs.
The rise in property listings and transactions is a welcome change for those who struggled to move during the market downturn, as well as for businesses reliant on property sales, such as estate agents, lenders, and housebuilders. Tony Gambrill, regional sales director at Chestertons, observed, “We are seeing house-hunters who feel that market conditions have improved overall [with] lower interest and mortgage rates. This additional buyer confidence will result in demand remaining high well into the autumn.”
For more insights on the UK property market and to explore the latest listings, visit Zoopla. As the autumn season approaches, both buyers and sellers will be watching closely to see how these evolving conditions shape the market’s trajectory.
