The UK housing market is performing strongly. Following a series of challenges in 2023, the average property price is growing again and the sector has proven its resilience once more.
At the beginning of August, Nationwide reported that house prices were growing faster than at any point in the last 18 months.
The annual growth rate of 2.1% recorded in July 2024 was welcome news for homebuyers, investors, property owners and the industry as a whole.
However, the biggest news in August was the Bank of England cutting the base rate of interest following seven consecutive holds. The new rate of 5% - down from 5.25% - was widely viewed as a positive step.
It had also been expected. Rising house prices were one clue, and another was falling mortgage rates.
High street lenders moved ahead of the market in anticipation of an interest rate cut. For example, two-year fixes were available at a rate almost 1% lower than they were 12 months ago, and Nationwide offered a five-year fix that was under 4%.
With so much good progress already being made, the question then became: What would happen after the rate cut?
Rate cut boosts housing market and reduces mortgage prices in the UK
The Bank’s interest rate cut has had two big effects on the market within a month of it happening.
Firstly, figures from Rightmove show that the number of buyer enquiries has gone up by 19% since the rate cut. That is a big jump from the previous annual increase of 11% recorded in July.
Rightmove's Tim Bannister said it was clear that the Bank's decision had "sparked a welcome late summer boost in buyer activity.
"As the summer holiday season comes to an end, the conditions are there for a more active autumn market."
Secondly, mortgage rates continue to fall and have reached their lowest point in two years according to The Negotiator.
NatWest is now offering a 3.83% five-year fixed rate, and seven of the country’s 10 largest lenders are now offering fixed-rate deals below 4%. These are the lowest rates for September 2022.
That’s great news for new buyers who are looking to finance their next property purchase, but it’s also good news if you already own a property on a mortgage.
Now, the cost of remortgaging will also be lower and you can either release equity or get a better repayment deal much more easily – and affordably – than before.
Is this a good time to buy UK property?
Overall, this is a great time to buy property in the UK, either as a homeowner or a buy to let investor. Prices are on the up and borrowing costs are down, giving you a great opportunity to get more for your money and enjoy greater returns in the future thanks to ongoing market growth.
City centre markets in particular are set to boom. These are the areas in places like Manchester and Birmingham which have huge demand for property, a low level of supply and a large number of people with high disposable income.
Luxury properties close to transport links are extremely popular and a great option for anyone looking at their next property purchase.
Discover our range of UK buy to let apartments for sale and get in touch with the team today to find out more.
