Sentiment in the housing market in Britain can be rather flighty at times, turning a 180 on the publication of a positive house price index and back again on the release of another showing a drop. Rightmove’s monthly report on house prices and the more general health of the market is one of the more weighty reports.
August’s edition led with this month’s base rate cut “spurring a further upturn in market activity”.
“The first Bank of England rate cut for four years at the start of the month has helped to accelerate mortgage rate drops and contributed significantly to improved buyer demand,” the property listings site’s director of property science, Tim Bannister said.
“These better conditions are helping to set up a positive Autumn market, and a further spur to activity following the Bank Rate cut has led Rightmove to raise its 2024 forecast from a 1 per cent drop over the whole of 2024 to a 1 per cent rise in new seller asking prices.”
While Rightmove conceded that there are still “some uncertainties ahead” the scene is now set for “a positive remainder of the year”.
The number of sales being agreed between buyers and sellers continues to track positively at 16 per cent ahead of last year. The number of new sellers coming to market is now a stable 5 per cent ahead of this time last year.
Mortgage rates continue to head downwards and have picked up some pace in recent weeks.
The average five-year fixed mortgage rate is now 4.80 per cent, which though still high compared with three years ago, before the first of 14 consecutive Bank Rate increases, is an improvement from 5.82 per cent at this time in 2023.
A more positive outlook is very welcome indeed – all brokers know it’s been a tough and highly unpredictable four years. It is worth being a bit circumspect though. As Mr Bannister noted, uncertainties remain.
We are yet to hear the new government’s economic plans in detail, with Chancellor Rachel Reeves’ inaugural Autumn Statement scheduled to take place on 30 October. One base rate cut from the Bank of England has provided a confidence boost, but it’s far from certain that another will follow.
The US is in full swing election mode, with Kamala Harris’ nomination throwing a huge curveball into the mix. Whether she or Donald Trump lands the next four years in the Whitehouse will have a massive impact on the US economy and, thus, on our own. Brokers are all too aware that surviving and thriving in the market today is about much more than competitive mortgage rates.
The Financial Conduct Authority’s consumer duty rules are perhaps the biggest reinvention of financial services regulation in the mortgage market since M-Day in 2004.
Complying with the duty, embedding its spirit into the advice process and demonstrating that evidentially is an ongoing commitment for all intermediaries. It brings with it both opportunities and challenges, and getting it right is imperative.
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