Prices are declining, yet Rightmove predicts a bustling autumn for the housing market

In the UK, the housing market is gearing up for a busy autumn, following the Bank of England's interest rate cut in August. This move, along with falling inflation rates, has sparked renewed confidence among buyers and sellers.

According to Rightmove's latest House Price Index, asking prices reduced in the initial weeks of August. However, the Halifax HPI puts the annual house price growth rate for July at 2.3%. Despite the reduction, the average asking price still stands at £367,785, marking a 0.8% annual increase.

The asking price for a typical first-time buyer home decreased by 0.3%, while the asking price at the top of the ladder dropped by 2.3%. Interestingly, the asking price for second-stepper homes also decreased, by 0.9%. Across all types of property, typical asking prices fell between July and August.

The increase in buyer activity is evident in the number of potential buyers contacting estate agents about homes for sale. This figure has jumped from 11% annually in July to 19% since the start of August. Moreover, the number of sales being agreed is now 16% ahead of the near-peak-mortgage-rate period of a year ago.

The seasonal nature of the UK housing market is also at play. The spring is traditionally the most active time due to longer daylight hours for property viewing. However, the market typically quietens down over the summer and experiences an autumn rush. This year, it appears that trend is holding true.

The new Prime Minister, Keir Starmer, has emphasised the need for the new UK government to implement their Planning and Infrastructure Bill to liberalise the planning system and deliver new homes. This could potentially address the ongoing housing shortage and contribute to a more balanced market.

Zoopla is predicting a 2% rise in sold prices, while Rightmove has raised its forecast for asking price growth to 1% for this year. These predictions suggest a continued, albeit modest, growth in the housing market.

The increased activity in the housing market comes at a time when mortgage rates are more affordable. High mortgage rates during the early months of 2024 have now subsided, boosting buyer budgets in the housing market. Buyers are now paying 96.8% of the asking price for a home, the highest of any point in the past 18 months.

With the autumn rush upon us, it remains to be seen how the UK housing market will continue to evolve. However, the current trends indicate a busy and potentially competitive period for buyers and sellers alike.

Prices are declining, yet Rightmove predicts a bustling autumn for the housing market