By Rightmove has released its House Price Index for September. It can be seen here, and says:
As the property market enters the typically busy autumn season, early action is already underway, with both buyers and sellers capitalizing on improved conditions. The average new seller asking price has risen by 0.8% (+£2,974) this month to £370,759, which is double the long-term average September increase. This rise in prices is being driven by increased activity levels, as mortgage rates trend downward and property choice expands.
Strong Rebound in Sales Activity
- Sales agreed between buyers and sellers have surged by 27% compared to last year, when the market was more subdued.
- The number of new sellers coming to the market has increased by 14% year-on-year, signaling renewed confidence among homeowners.
- The average number of available homes per estate agent is now the highest since 2014, at 33 homes per branch.
Caution Still Looms
Despite the positive market movement, caution remains, with value-conscious buyers taking time to secure the right property. It now takes an average of 60 days for sellers to find a buyer—three days longerthan last year. Additionally, while mortgage rates are lower than their July 2023 peak, the current 5-year fixed mortgage rate of 4.67% is still nearly double the 2.34% from three years ago.
Uncertainties Ahead
With the Autumn Statement looming, there are uncertainties about how potential tax changes, especially regarding capital gains tax, could impact the market. A record number of former rental properties are currently being listed for sale, suggesting more landlords are exiting the market in anticipation of upcoming policy changes.
Key Takeaways
- Early autumn movers are benefitting from increased property choices and improved market conditions.
- Competitive pricing is crucial, as buyers remain cautious and selective.
- All eyes are on the Bank of England’s decision on a potential second rate cut and the Autumn Statement on October 30th, which could further impact the property market.
Industry comments
Tom Brown, Managing Director, Real Estate at Ingenious, said: “Today’s data shows that the resilience and appeal of the UK property sector persist. Though we have seen higher inflation and sticky borrowing rates, we welcome the BoE’s recent rate cut and what will hopefully be the start of the much needed falling rate cycle.
“There’s clearly a significant and notable shortage of housing inventory across various price brackets and locations. Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away. However, it’s crucial to recognise that the situation isn’t consistent nationwide or across different property pricing brackets. It’s helpful to delve into subsectors and regional dynamics when assessing opportunities, as a broad market view can be misleading. In the real estate sector, we’re seeing significant investment capital for assets for long-term rental. On account of their scale and buying power, these typically institutional investors face fewer disruptions than owner occupiers or small-scale Buy-to-let investors.
“At Ingenious, we continue to work closely with borrowers and investors, adapting to the dynamic market landscape and broader economic shifts, including those related to the climate crisis and changing lifestyles. We are expanding the reach of our development lending product to provide extended stabilisation terms for specialised developers in the rental sector. Furthermore, we’re introducing special lending terms for developers focused on reducing embedded carbon in their construction practices.”
Jason Dainty, co-founder of Hopkins & Dainty in Derbyshire “There is a good level of activity at the moment leading into the Autumn, even though summer is typically a quieter period for the market as people head off and come back from holiday. We’re seeing more sellers coming to market, and overall we’re seeing some positive sentiment amongst both sellers and buyers. Well-priced and attractive properties are still selling quickly, even getting interest on the first day of marketing. However, the price has to be right – otherwise, they risk being ignored by prospective buyers. I’m hopeful for a positive run up to Christmas now as Autumn gets underway.”
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