At the start of August, the Bank of England cut interest rates from 5.25% to 5%, the first rate reduction for four and a half years and Halifax, Britain’s biggest mortgage lender since March 2024, predicts that the rate dip, alongside any potential further reductions during the course of the year, albeit modest ones, could drive an increase in property prices throughout the rest of 2024.
Prices rose last month following a relatively flat three months or so. According to Halifax, the average UK property price for July was £291,268. This represented a rise of more than £2,200 compared with June. Annual house price growth in the 12 months to July was 2.3%, the strongest since the beginning of 2024.
The only UK region to experience a fall during this period was the east of England. In the south-east of the country, the average property price tag as of last month was £386,000, while London continues to have the most expensive properties.
Head of mortgages at Halifax Amanda Bryden told journalists that the organisation expected:
“a modest upward trend throughout the rest of this year.”
She added that those who want to remortgage, buy their first place or move up the housing ladder, should feel encouraged by the latest figures.
One major online property portal agrees, predicting a 1.5% rise in property prices by the end of 2024.
Another major lender, the Nationwide, says UK house prices have increased at the quickest rate in 18 months, although it agrees there are some lingering affordability issues.
Its chief economist, Robert Gardner, reported that housing market activity had been ‘steady’ in recent months, describing the pace as ‘respectable’ given the backdrop of still-high interest rates.
What do estate agents predict?
So while estate agents and lenders anticipated that 2024 would be a pretty bleak year for property prices, recent forecasts have been significantly more upbeat. For example, one estate agency which forecast a 3% dip for 2024 last autumn has now upgraded this prediction to an overall increase of 2.5%, underpinned by both the easing of interest rates and the improved economic outlook.
Another large agency has offered a forecast of 3% rise in house prices across the UK as a whole.
Meanwhile, one agent commented on how much market conditions have improved in 2024 so far, and on the higher levels of purchaser confidence. Equally, a large group of estate agents has described market momentum as “building steadily … and despite the surprise snap election, this shows no signs of slowing down”.
Impact on home loans
It’s true that the impact on variable and tracker mortgages will be minimal, while there will be no change at all to fixed-rate products. But there’s a real sense that things are moving in the right direction.
Some lenders have now brought down their own rates in response to the Bank of England cut. And already, competition between lenders has started to heat up, both in advance of and after the most recent rate decision from the Bank of England.
Barclays and HSBC, for example, have engaged in battle over their five-year fixed-rate products. (Although these offers are aimed at those who are able to afford a comparatively sizeable deposit.)
Oakfield says
At Oakfield Estate Agents, we agree with many of the positives detailed above, and are delighted that property prices appear to be bouncing back. We’ve been consistently busy since the spring, and have seen enthusiasm grow across buyers and sellers, accelerated by this month’s cut in interest rates.
We’re now starting to see a number of buyers push ahead with decisions they’ve been putting off for months, and we believe buyer and market confidence are on the rise.
What’s more, we’re cautiously optimistic this upward trend will continue throughout the rest of the year. So if you’ve been thinking about buying or selling but have been deterred by high rates or anything else, now could be a much more positive time to see your transaction through.
With offices in Hastings, Bexhill-on-Sea, Eastbourne, Uckfield, Heathfield and Lewes, we’re ideally placed to help you make your next move in East Sussex. What’s more, we draw on extensive local knowledge, having been active in our part of the world since the 1990s.
Give a member of the friendly, professional team a call, or drop us an email, and we’ll take it from there. Check out our contact details here.