This time of year typically marks a slow one for the housing market, with summer holidays dampening demand – and 2024 is no different.
But once September rolls around, it’s entirely possible there is going to be a meaningful uptick in buyer interest – more so than usual – according to many property experts.
There are a couple of factors that make this scenario feasible. The election is done and dusted and we have a new government, big lenders are making decent mortgage rate reductions and house prices are holding steady.
The above stability may mean more would-be sellers, who have sat on their hands, may be tempted into listing and making the move.
Brighter outlook: Experts are predicting a busy autumn ahead – largely thanks to more stability in the mortgage market
This week’s Office for National Statistics data shows just how low transactions have been so far this year, compared to even last year. It’s been slow out there.
I keep track of properties being listed in my area via a couple of the online portals, and it’s been a drip-feed, rather than the usual deluge in the past 12 months.
I personally know a fair few friends who have been holding off buying, fearful of higher mortgage rates than they’ve been used to.
But the very best home loans are now coming in under 4 per cent once more, creating confidence.
The Consumer Price Index measure of inflation nudged slightly higher this week to 2.2 per cent, but core inflation eased a little, slightly better than what was forecast.
Markets remain split about whether there could be further base rate reductions this year – but we’re heading in the right direction, and that seems to be enough to stimulate competition between lenders.
Mortgage rates could continue to head lower. Not 1 or 2 per cent low, but far better than what we’ve seen in recent times.
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Three of the strongest names (in my opinion) when it comes to property and mortgages were upbeat with their comments on this week’s ONS and inflation data, as I outline below.
The ONS data shows house prices sit at £288,000 and have recovered to a similar level to last year but still £7,000 off the peak of summer 2022.
But they have risen five months in a row, up £8,000 since the start of the year.
In short, there are often double-digit price falls forecast – think during the pandemic, and more recently, when mortgage rates started to rise rapidly. However, these falls never seemingly happen.
Andrew Montlake, managing director at mortgage broker Coreco, said: ‘The resilience of the property market over the past year has been notable.
‘The double-digit price falls many predicted simply haven’t materialised. Since the base rate was cut earlier this month, and with mortgage rates continuing to tumble, we’ve seen a surge in demand. We’re bracing for a much busier autumn ahead.’
That potential uptick in demand is echoed by David Hollingworth, associate director at L&C Mortgages and This is Money columnist – and he believes mortgage rates have further to fall.
He adds: ‘In a cutthroat market rates have already tumbled further with a clutch of big lenders now offering 5-year fixed rates below 4 per cent, levels not seen since much earlier in the year.
‘That direction of travel is unlikely to be disturbed by reaction to today’s inflation reading and the market will have been well prepared for an increase.
With mortgage rates starting to fall and more bank rate cuts likely to come we believe that house prices will continue to rise in the second half of the year.
‘Instead, we’re likely to see continued and frequent movements in mortgage rates, as lenders continue to adjust and improve where they can.
‘The lowest rates have tended to be on offer to those buying a new home. As the rate outlook improves it should help to rebuild some of the confidence that has been badly dented by the rapid rise in interest rates in recent years, leading to a more sustained pick-up in activity over time.’
Taking a peek through dozens of estate agent responses in the Royal Institution of Chartered Surveyors report earlier in the month – a task I religiously undertake every month to get a snapshot of mood music across the country – there are plenty in there forecasting a strong autumn.
Much of the comments about an improving outlook mention falling mortgage rates unlocking the market.
Anthony Codling, of RBC Capital Markets, says: ‘With mortgage rates starting to fall and more bank rate cuts likely to come we believe that house prices will continue to rise in the second half of the year.
‘We sense that the market will enjoy a buoyant autumn selling season and that housebuilders will have a good second half and start 2025 with very healthy order books.’
Don’t be surprised to see house prices nudging higher, mortgage rates continuing to ease – and plenty of eager sellers ready to pull the trigger and list.
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