The “traditionally busier” autumn property market appears to have arrived early this year with asking prices for new home listings rising more than usual, Rightmove claims.
The housing market appears to have turned a corner after the Bank of England’s interest rate cut in August, while mortgage rates have continued to drop.
This has boosted buyer purchasing power and sellers are looking to seize the opportunity.
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The latest Rightmove House Price Index for September shows the average price of a property coming to the market for sale has increased by 0.8% this month, rising 1.2% annually.
September almost always sees a rise in prices following the summer lull in August, but this year’s increase of 0.8% is double the long-term average, Rightmove says.
The average UK asking price is now £370,759, up by £2,974.
It is a reflection of renewed confidence in the property market but with warnings of a “painful” Budget in October, it is unclear how long the positive feelings will last.
Positive September sentiment
The recent interest rate cuts and falling mortgage rates finally appear to be getting the housing market moving.
The Rightmove figures show sales agreed are up by 27% year-on-year as pent-up buyer demand is being released after households suffered with high bills and the cost of living crisis earlier this year.
Homeowners appear more confident to come to market, with the number of new sellers up by 14% on this time last year and the average number of available homes for sale per estate agent at its highest since 2014.
“The certainty of a new government followed by the first bank rate cut in four years invigorated the market, opening a window of opportunity for movers to act," says Tim Bannister, director of property science at Rightmove.
“Some of this will be pent-up demand from those who had to hit the pause button until now. However, windows of opportunity tend to need a momentum of good news to stay open, and there are still uncertainties ahead which could cause some of the current market activity to ease.”
The market remains cautious, Rightmove warns. It’s currently taking an average of 60 days for a seller to find a buyer, three days longer than in the more subdued market at this time last year as value-conscious buyers take their time to find the right home at the right price.
“Early autumn movers who are acting quickly and taking advantage of the improved market conditions are getting the pick of quality homes for sale,” adds Bannister.
“Home-owners who are thinking of coming to market soon shouldn’t let the increased activity make them over-optimistic and must price competitively to sell. With affordability still very stretched for many, choosy buyers are taking their time to browse the increased number of homes for sale and find the perfect home at the right price.”
Is now the time to sell a property?
Many analysts started the year with dire predictions of house price declines, which may have deterred those hoping to find the best time to sell a property.
But slowing inflation and lower interest rates have boosted buyer budgets, giving homeowners renewed confidence that they can get a decent price on their home.
The market could get another boost if interest rates are cut again in the coming months. But there are a couple of potential stumbling blocks approaching, which could dent demand.
Energy bills are set to rise next month, plus there is the October Budget, where the chancellor is expected to raise taxes. This could hit landlords looking to add to their portfolios, particularly if there is a capital gains tax rise.
“There are question marks over how the market will be affected by announcements in the Autumn Statement, but until then we expect that market momentum will continue as the autumn action rolls on,” adds Bannister.
Nathan Emerson, chief executive of estate agency trade body Propertymark, says it may be worth acting before the Budget.
“It is important to consider what effect the Budget at the end of next month may have on the housing market and if these figures reflect a keenness by consumers to complete on a property before any potential changes to the current tax structure might be announced,” he says.
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