The UK property market is growing both homebuyers and investors can look ahead with confidence. The Bank of England’s rate cut has fuelled a bounce back which is now becoming undeniable.
New data from Zoopla shows that confidence is flowing into the market and the harder times seen in 2023 are now firmly in the past.
House prices have risen by 1.7% over the first seven months of 2024, compared to an overall fall in the second half of last year. By the end of 2024, it is estimated that they will have gone up by 2.5%, with 1.1 million sales predicted for the year.
Buyer demand is up 20% year-on-year and new sales have increased by 25%. Even better, the number of new homes listed has reached a seven-year high. There is no better way to judge how confident the market is than to look at how many people have judged It a good time to move house.
A large majority of those sellers are also planning to buy their own home. This will stimulate the market further and is more proof that more and more people consider the challenges of 2023 to no longer be a factor.
Borrowing becoming more accessible
High street lenders moved ahead of the rate cut to lower their rates in July, then continued to compete with each other on rates in August. We saw Nationwide offer the first sub-4% five-year mortgage and then others follow suit.
However, lowering the interest rate is not the only way to make borrowing more affordable. Now, Halifax and Lloyds have taken steps to offer improved loan-to-income ratios to first time buyers. That means first time buyers can now borrow 5.5 times their income rather than the previous limit of 4.9.
In effect, it brings a huge new group of potential buyers into the market. It is estimated that the two lenders are offering a total of £2bn more to potential buyers.
Andrew Asaam, homes director at Lloyds Banking Group, said: “Getting the keys to a first home is a big deal, but it’s tough right now. Aspiring homeowners have been struggling with house prices rising faster than their wages. They need to save for a deposit, keep up with rent, and choose the right mortgage.
“Becoming a homeowner is one of the most fundamental things you can do to secure your long-term financial future, but it’s not easy. First-time Buyer Boost aims to make this journey easier by helping people make their income go even further.”
That is a lot of property and it is good news for the housing market. More buyers with greater spending power means greater competition for homes. That will lead to price growth and help to build on the positive news we have already seen in the last six weeks.
Q4 2024 UK property market forecast
More buyers entering the market, higher confidence, more affordable borrowing and a seven-year high in market activity all point in one direction.
Property has always been resilient, but indications are that we are seeing the start of a new growth cycle. Long term forecasts from the likes of Savills show that we could see house price growth of more than 21% on average by the end of 2028.
This is a great time to buy property in the UK. Want to learn more about the best UK buy to let locations? Or want to find the perfect new home for sale? See our available opportunities and get in touch with the team today.
