521, 000 £ 719, 111 - 1. 2% £ 373 £ 2. 64b n 424
INCREASING BALANCE
Market conditions continue to improve as we move into autumn. Lower mortgage rates and an improving economic outlook have brought more sellers and buyers into the market, boosting sales volumes and supporting slow but steady house price growth.
POSITIVE SENTIMENT
The Bank of England has delivered its first interest rate cut in more than four years, taking the rate to 5%. Inflationary pressures are slowly coming under control, reaching 2.2% in July 2024, close to its 2% target (ONS). Affordability metrics are also improving, underpinned by lower mortgage rates and sustained strong earnings growth (ONS).
A round of up forecasts indicates property market sentiment is much more positive following the interest rate cut and General Election helping set up a more positive autumn market. The latest consensus forecast predicts 2.2% house price change through 2024, up from a 2024 forecast of -2.2% at this time last year (HM Treasury Average of Independent Forecasts). Rightmove have also upped their forecast for house prices this year from a 1% drop over the whole of 2024 to a 1% rise in new seller asking prices.
SENSE OF NORMALCY
2024 continues to exhibit a return to normalcy and a return to property market momentum after what can be considered a tumultuous unsettling few years where interest rate hikes and the cost-of-living crisis dampened market activity. The market is recalibrating to the new norm of higher interest rates and people are going ahead and getting on with their move. Sellers are bringing homes to the market at an aboveaverage rate, many of which are also buyers, increasing sales agreed. In the North West, 17% more sales were agreed in Q2 2024 compared to Q2 2023 (TwentyCi).
DEMAND
Demand is on the rise, with mortgage approvals for house purchases reaching 62,000 in July, the highest level since September 2022. This marks a 2.3% increase from the previous month and a 26% increase from a year earlier (Bank of England). The transaction pipeline is steadily building, with 90,630 transactions in July, a 6.7% increase compared to the same month last year (HMRC). Supported by the interest rate cut and subsequent easing of mortgage rates, sales volumes have the potential to pick up moving forward. A net balance of +45% of survey participants now expect sales volumes to rise over the next twelve months, up from +40% previously. Near-term sales expectations have also reached their most upbeat level since January 2020 (RICS UK Residential Market Survey).
EDGING UPWARDS
House prices nudged up 0.5% in August, bringing the rate of annual growth to 2.4%. This marks the fourth consecutive monthly increase and the highest annual growth rate since December 2022 (Nationwide). While activity is expected to improve, price increases are likely to be more modest, as whilst mortgage rates have improved they remain well above the lows of 2021 and have kept buyer affordability stretched. In the prime market, the average price of a property in the North West is £719,000, having moderated slightly by -1.2% year-on-year. Rochdale and Liverpool are the best performing markets.
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N O R T H W E S T P R E M I U M M A R K E T
£189,903
£521,000
£719,111
£134,899
£334,000
£449,145
£139,898
£325,000
£424,531
£217,200
£450,000
£583,938
£370,484
£857,000
£1,167,417
£199,420 £540,000 £738,699