A pedestrian looks at residential properties for sale in an estate agent’s window in Windsor, west London.
Justin Tallis | AFP | Getty Images
LONDON – Lower mortgage rates are sparking a rally in Britain’s housing market following a surge in home sales last month, data shows.
Agreed home sales rose 25% year-on-year in the four weeks to September 22, the fastest pace of growth since spring 2021 “as families who had put off making the decision to move over the past 2 years return to the market.” , according to research released by real estate portal Zoopla on Thursday.
Data shows that the number of inquiries from home buyers has also increased by 26% annually during the same period.
UK homebuilder shares Taylor Wimpey and Bharat Development Both rose more than 2.1% after the data was released.
it’s like a house price rise Loan growth in September was the fastest in almost two years, at an annual rate of 3.2%, according to Nationwide, compared with 2.4% in August, when lenders began slashing borrowing costs in response to the Bank of England’s first interest rate cut in more than four years.
According to the latest data, five-year fixed-term mortgage rates have now fallen to 4.57%, down from 5.53% last year data Compiled by real estate portal Rightmove. Interest rates on some such products have been reduced to 3.7%, well below the Bank of England’s key rate of 5%.
“Lower mortgage rates are giving homeowners, many of whom have been on the sidelines for the past two years, a much-needed confidence boost,” Zoopla executive director Richard Donnell said in the report.
Bank of England says mortgage approvals rise to highest level in two years in August say monday.
Market watchers are currently awaiting the Bank of England’s meeting on November 7 for further developments in borrowing costs, with Governor Andrew Bailey telling the Guardian on Thursday that the Bank of England may “More aggressive” Cut interest rates if inflation data continues to be good.
Price growth differs from budget
On an annual quarterly basis, house price growth has been most significant in Northern Ireland (8.6%) and Scotland (4.3%), with the north of England outpacing the south, according to Nationwide. Nonetheless, London remained the best-performing southern region, with prices rising by 2%.
However, Nationwide Chief Economist Robert Gardner noted that apartment sales continue to lag in the post-pandemic “race for space.”
More such stocks have entered the market, e.g. Landlords are hoping to sell their buy-to-let properties ahead of expected tax increases in the Labor government’s upcoming autumn budget on October 30.
Donnell said as more second-home owners enter the market, that could dampen price growth in the coming months.
“Speculation about possible tax changes in the budget and the impact of previous tax changes continue to fuel growth in the number of homes for sale. We remain in a buyer’s market and a greater selection of homes for sale will keep house price inflation at bay heading into 2025.” he pointed out.
Finance minister Rachel Reeves said she may have to raise taxes after discovering a £22 billion ($29 billion) “black hole” in the public finances.
After excluding changes to income tax, National Insurance Social Security payments and VAT (sales tax), increases in capital gains tax and inheritance tax – both of which can affect property sales – are still on the table.
Meanwhile, potential changes to the country’s controversial non-resident tax status are also spurring seller activity at the top end of the market, as ultra-wealthy UK residents consider moving to other areas with lower taxes.
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