In a surprising turn of events, the UK housing market has demonstrated remarkable buoyancy despite looming economic uncertainties. According to recent data from property portal Rightmove, the number of homes sold in the UK has surged by nearly a third compared to the same period last year. This uptick in sales has occurred even as buyers grapple with concerns over the potential impact of the upcoming budget on property prices.
A Market Defying Expectations
The UK property market has long been known for its resilience, and the latest figures from Rightmove serve as a testament to this fact. Despite the specter of the October budget hanging over the market, sales agreed have skyrocketed by an impressive 29% year-on-year. This surge in activity has been accompanied by a 17% increase in the number of house hunters reaching out to estate agents, indicating a healthy level of underlying demand.
Sales activity has not only bounced back from the low of last year but has continued an upward trajectory. There is also a healthy level of underlying buyer demand as people continue to plan their next move.
Tim Bannister, Director of Property Science at Rightmove
A Buyer’s Market?
One factor contributing to the buoyant market is the increased supply of homes for sale. Rightmove estimates that the number of properties on the market is 12% higher than a year ago, reaching a 10-year high. This abundance of choice has empowered buyers, granting them greater negotiating power and tempering price growth. As a result, the average asking price for properties coming to market has risen by a modest 0.3% month-on-month, significantly lower than the long-term average of 1.3% typically seen in October.
While activity has been exceptional, price growth has been muted. This could be down to the new normal of higher interest rates, but also a particularly steep increase in values post-pandemic, which will need more time to level off.
Joel Baseley, Founder and Director of Rampton Baseley
Affordability Concerns Linger
Despite the positive outlook, concerns about buyer affordability persist. Some potential buyers are holding off on purchases until mortgage rates drop further. The average five-year fixed mortgage rate currently stands at 4.61%, marking the first weekly increase since May. However, analysts anticipate another interest rate cut from the Bank of England next month, which could provide a boost to buyer confidence.
Moreover, the upcoming budget announcement on October 30th has left some buyers hesitant, as they await clarity on any potential implications for the housing market. Estate agents report that a portion of prospective buyers are delaying their moves until after the budget, hoping for greater certainty and potentially cheaper borrowing costs.
Some movers are now waiting for budget clarity and anticipated cheaper mortgage rates later this year. Despite a budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025. Market activity remains strong, but affordability is still the biggest barrier facing many movers.
Tim Bannister, Director of Property Science at Rightmove
Navigating the Road Ahead
As the UK housing market continues to navigate a path through economic uncertainties, it remains to be seen whether the current momentum can be sustained. Much will depend on the outcome of the budget, the trajectory of interest rates, and the evolving sentiments of buyers and sellers alike.
For now, the market’s resilience in the face of adversity serves as a reminder of the enduring appeal of homeownership in the UK. As buyers and sellers alike adapt to the “new normal” of higher borrowing costs and a more balanced market, the coming months will be crucial in determining the long-term health and stability of the UK housing sector.
Only time will tell if the market can continue to defy expectations, or if the budget-shaped cloud on the horizon will finally bring a dose of reality to a market that has thus far proven remarkably resistant to external pressures. Regardless of the outcome, one thing remains certain: the UK housing market will continue to be a closely watched barometer of the nation’s economic health, and a source of endless fascination for buyers, sellers, and observers alike.
While activity has been exceptional, price growth has been muted. This could be down to the new normal of higher interest rates, but also a particularly steep increase in values post-pandemic, which will need more time to level off.
Joel Baseley, Founder and Director of Rampton Baseley
Affordability Concerns Linger
Despite the positive outlook, concerns about buyer affordability persist. Some potential buyers are holding off on purchases until mortgage rates drop further. The average five-year fixed mortgage rate currently stands at 4.61%, marking the first weekly increase since May. However, analysts anticipate another interest rate cut from the Bank of England next month, which could provide a boost to buyer confidence.
Moreover, the upcoming budget announcement on October 30th has left some buyers hesitant, as they await clarity on any potential implications for the housing market. Estate agents report that a portion of prospective buyers are delaying their moves until after the budget, hoping for greater certainty and potentially cheaper borrowing costs.
Some movers are now waiting for budget clarity and anticipated cheaper mortgage rates later this year. Despite a budget-shaped cloud on the horizon, the big picture still looks positive for the market heading into 2025. Market activity remains strong, but affordability is still the biggest barrier facing many movers.
Tim Bannister, Director of Property Science at Rightmove
Navigating the Road Ahead
As the UK housing market continues to navigate a path through economic uncertainties, it remains to be seen whether the current momentum can be sustained. Much will depend on the outcome of the budget, the trajectory of interest rates, and the evolving sentiments of buyers and sellers alike.
For now, the market’s resilience in the face of adversity serves as a reminder of the enduring appeal of homeownership in the UK. As buyers and sellers alike adapt to the “new normal” of higher borrowing costs and a more balanced market, the coming months will be crucial in determining the long-term health and stability of the UK housing sector.
Only time will tell if the market can continue to defy expectations, or if the budget-shaped cloud on the horizon will finally bring a dose of reality to a market that has thus far proven remarkably resistant to external pressures. Regardless of the outcome, one thing remains certain: the UK housing market will continue to be a closely watched barometer of the nation’s economic health, and a source of endless fascination for buyers, sellers, and observers alike.
