The housing market in the UK is experiencing a resurgence in buyer confidence, thanks to a pause in bank rate increases and a drop in inflation. Bourne Estate Agents are here to highlight the key points from the provided information:
Boost in Buyer Confidence: The recent pause in bank rate hikes has contributed to increased confidence among prospective homebuyers.
Higher Buyer Enquiries: Estate agents have observed a 12% increase in enquiries for homes since the August bank holiday.
Consumer Confidence: The rise in demand is not only due to seasonal trends but also reflects improved consumer confidence, which is at a two-year high.
Regional Variations: Sellers in southern England and London have benefited the most, with buyer numbers up by 19% in the South East and 16% in London.
Sales Agreements: The number of new sales agreements has also risen and is now closely tracking levels from 2019.
Increasing Supply: After a shortage of available homes for sale in 2021, supply levels are now increasing, providing buyers with more choices.
Prospect of Lower Mortgage Rates: The expectation of lower mortgage rates has further boosted buyer confidence. Experts suggest that as mortgage rates approach 4%, more buyers are likely to enter the market, supporting sales and pricing levels.
Unwillingness to Compromise: Buyers, particularly first-time buyers, are unwilling to compromise on their housing preferences. They are looking at longer mortgage terms to afford the homes they desire, despite higher mortgage rates reducing their buying power.
Impact on House Prices: The housing market has experienced a 0.5% price decline over the last year, marking the first annual decline in over a decade. The steepest price falls are in southern England, where homes are more expensive.
Future House Price Expectations: It is anticipated that house prices may fall by 2-3% in 2023 compared to 2022, but they will still be significantly higher than they were in 2020. Even if mortgage rates decrease below 5%, house prices may continue to fall into early 2024.
Affordability and Mortgage Rates: The article suggests that improving buyer affordability will require lower mortgage rates.
In summary, the housing market in the UK is experiencing increased buyer activity and confidence due to factors such as a pause in interest rate hikes and expectations of lower mortgage rates. However, the housing market is still facing regional variations and challenges, including falling house prices and the need for further improvements in buyer affordability through reduced mortgage rates.
If you have any further questions surrounding the increasing buyer activity within the housing market, please click here to contact one of our knowledgeable estate agents here at Bourne.
Source: Adapted from Zoopla