In a slight dip, average new seller asking prices dropped by 0.4% (£1,617) in July, bringing the average property listing to £373,493, according to the latest Rightmove house price index. Despite this decrease, market activity has shown resilience amid the General Election campaign, with potential movers possibly waiting for a Bank of England base rate cut before making a move.
Market Stability Amid Political Climate
Rightmove’s data indicates a stable housing market overall, with prices still 0.4% higher than a year ago. The portal reports an encouraging 15% increase in sales agreements compared to the same period last year, a time when mortgage rates were peaking. New sellers entering the market have risen by 3% year-on-year, while buyer demand remains steady.
Anticipated Rate Cut Could Boost Autumn Market
Market analysts predict the Bank of England’s first base rate cut could occur in August or September, a move expected to invigorate the housing market. Currently, the average five-year fixed mortgage rate stands at 4.97%, down from last July’s peak of 6.11%, yet still significantly higher than the 2.51% average in July 2021.
Election Campaign’s Minimal Impact on Home Moves
Contrary to concerns that the General Election would hamper home-moving activity, Rightmove’s figures reveal that the majority of transactions have proceeded unaffected. Tim Bannister, Rightmove’s director, notes the importance of political certainty, highlighting the new government’s large majority as a potential confidence booster for home-movers.
Government Policies and Market Prospects
Bannister expressed optimism regarding the new Chancellor’s announcements on housebuilding targets and planning reform, viewing them as positive steps towards fulfilling manifesto promises. He emphasized the need for sustainable housing policies, particularly to support first-time buyers, who face high mortgage rates and impending stamp duty increases.
Foxtons CEO Observes Market Resilience
Guy Gittins, CEO of Foxtons, commented on the market’s steadfastness despite the election-induced uncertainty, pointing to the marginal reduction in asking prices as a reflection of cautious buyer and seller sentiment. He also noted that England’s Euro 2024 progress has not distracted market activity.
With the election concluded, Gittins anticipates increased market activity, buoyed by the potential rate cut in September. He predicts strengthened momentum over the summer, especially for properties priced at one million pounds and above, as pent-up buyer demand is released.
Outlook
As the political landscape stabilizes and with potential rate cuts on the horizon, the housing market appears poised for a robust autumn, driven by renewed buyer and seller confidence.