808, 000 £ 1, 205, 752 - 5. 4%
656 £ 35. 9b n 14, 948
ORTGAGE AP P ROVALS (AU G)
ACTIVE MARKET
As we enter the final quarter of the year, falling mortgage rates have led to an increase in house price growth and a boost in activity levels.
MORTGAGE RATES FALLING
The Bank of England voted to keep rates at 5% in the September meeting, having cut them in August, stating more cuts are on the horizon if inflation remains under control. The latest consensus forecast for the Bank rate is to be 4.7% in Q4 2024, suggesting economists expect one more 25 basis point cut before the year end. Just under 50% of mortgage holders said they would have been likely to shop around for a new mortgage deal if the Bank of England had lowered rates in its latest meeting, prompting lenders to compete for their business (Compare the Market). And certainly, mortgage rates are significantly lower than a few months ago: the lowest two and five-year fixed rate mortgages are currently 3.94% and 3.74%, having fallen from 4.68% and 4.28% respectively since the start of July. The mortgage market points to rates potentially falling further over the next few months, pricing in the expectation that more interest rate cuts are coming. Affordability remains stretched, but is slowly improving, on the back of these mortgage rate improvements.
ACTIVITY
61% of agents surveyed by Dataloft (PriceHubble) say buyer confidence is improved compared to three months ago. This is alongside other market indicators suggesting that market momentum has continued to build; the number of sales being agreed is up by 27% year-on-year, a significant recovery compared to last year. There were 64,858 mortgage approvals in August, the highest level in two years and a 4% uptick compared to July. Approvals for remortgaging also increased from 25,200 to 27,200 in August after five
consecutive months of decreases, likely due to borrowers taking advantage of lower mortgage rates. Transaction momentum continues to build, there were 90,210 transactions in August, a 5% rise compared to a year earlier.
PRICES
The average property price has risen by 3.2% over the past 12 months, following a 0.7% monthly rise in September (Nationwide). This is the fastest annual growth recorded in almost 2 years. Average property prices remain below the peak achieved in mid-2022, but only by around 2%. The price trend towards the end of the year is expected to be similar: house prices are forecast to end the year with 2.0% growth, with a further 2.3% growth forecasted through 2025. In the prime market, the average price of a property is £1,205,752, having softened by -5.4% year-on-year. The Autumn Budget could be creating some uncertainty, particularly in the upper end of the market.
CAUTION REMAINS
Despite positive market data, caution remains, and pricing correctly remains key. The average time to find a buyer is currently 60 days, three days longer than this time last year as buyers remain price sensitive and are taking their time to find a well-priced home. Although market conditions are improving, as noted the upcoming Autumn Budget may be creating some short-term uncertainty. This was reflected in a dip in consumer confidence in September.
Data sources: PriceHubble Dataloft, GfK Consumer Confidence, Bank of England Mortgage Approvals, HM Treasury Consensus Forecasts, Mortgage rates from Money Facts, HMRC transactions, time to find a buyer Rightmove.
£ 5 4 6 ,0 0 0
£ 7 5 3 ,4 6 0
+ 5 .1 %
£ 3 4 9
£ 5 1 9 ,0 0 0
£ 7 1 5 ,1 5 6
-1 .7 %
£ 3 7 5
£ 5 7 5 ,0 0 0
£ 7 6 1 ,3 6 1
-2 .9 %
£ 3 8 5
£ 4 7 5 ,0 0 0
£ 6 1 4 ,2 0 9
-3 .5 %
£ 3 3 5
£ 7 5 4 ,0 0 0
£ 1 ,0 4 2 ,2 4 0
-2 .1 %
£ 4 9 9
£ 9 4 9 ,0 0 0
£ 1 ,3 4 9 ,8 8 1
-7 .1 %
£ 5 8 3
£ 4 0 6 ,0 0 0
£ 5 4 7 ,0 3 5
-2 .8 %
£ 2 9 2
£ 5 0 0 ,0 0 0
£ 6 7 5 ,5 3 6
-3 .3 %
£ 3 5 1
£ 5 3 0 ,0 0 0
£ 7 0 2 ,9 7 0
-0 .4 %
£ 3 4 1
£ 8 0 3 ,0 0 0
£ 1 ,1 0 5 ,8 5 4
-3 .6 %
£ 5 3 9
£ 1 ,6 0 0 ,0 0 0
£ 2 ,5 9 5 ,8 6 2
-8 %
£ 1 ,2 3 7
£268,719
£808,000
£1,205,752
£222,884
£729,000
£1,138,277
£214,070 £674,000
£1,057,454
£266,034
£654,000
£914,541
£433,508
£1,100,000
£1,581,633
£279,879 £825,000
£1,213,305