There’s been a 19% increase in potential buyers contacting estate agents since the Bank cut interest rates for the first time in four years, Rightmove’s house price index has revealed.
The base rate is now 5.00% following a 0.25% reduction on August 1st. Correspondingly the average 5-year fixed rate mortgage is now 4.80%, down from 5.82% a year ago.
It’s likely Labour’s victory in the general election on July 4th was another factor in activity rising, given that it’s provided some certainty on the country’s direction of travel.
Tim Bannister, Rightmove’s director of property science, said: “The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity.
“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.
“As the summer holiday season comes to an end, the conditions are there for a more active autumn market.
“The reaction from home-movers to what is hopefully only the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price prediction for the year.”
Rightmove now expects seller prices to rise by 1% over the whole of 2024, up from a reduction of 1%.
Tomer Aboody, director of specialist lender MT Finance, said: “Now that we’ve had the first interest rate cut in a few years, mortgages have followed suit, which has already led to more activity in the market.
“There has been an uptick in the number of buyers and sellers registering interest, keen to take advantage of lower mortgage rates.
“This, along with lower inflation numbers, has provided a positive outlook and feel-good factor for the market, bolstered by the hope of further rate reductions to come.”
