August House Sales Up On Last Year. What’s Next?
If you’re keeping an eye on the UK housing market, you’ll have noticed a bit of a buzz lately. According to the latest figures from HM Revenue & Customs (HMRC), house sales in August 2024 were up by 5% compared to the same month last year. It’s a welcome boost, especially after a year of uncertainty. But what’s really driving this surge, and what does it mean if you’re thinking of buying or selling?
What’s Behind the Numbers?
In August, an estimated 90,210 homes changed hands across the UK. That’s a solid uptick from the 2023 figures, though it’s worth mentioning that the numbers did dip slightly from July this year. A decrease of less than 1% might sound minor, but it shows that the market is stabilising rather than taking off wildly. So, what’s giving home sales a push?
The big factor seems to be the recent cut in mortgage rates. A few months ago, the prospect of securing an affordable mortgage felt like winning a game of chance, with many people put off by high interest rates and rising inflation. But things are looking up. Mortgage lenders have been offering more competitive deals, boosting confidence among prospective buyers just as we head into autumn.
The Bank of England’s Role in the Revival
It’s not just the mortgage rates doing the heavy lifting, though. The Bank of England has also played a part by easing back on interest rate hikes, thanks to a noticeable reduction in inflation. The Guild of Property Professionals’ chief executive, Iain McKenzie, pointed out that the Bank’s careful handling of inflation has set the stage for improved borrowing conditions.
What’s interesting here is that we’re not just seeing a temporary blip.
McKenzie believes that this positive trend will continue throughout the rest of the year. That’s great news if you’ve been holding off on a move, as the combination of lower inflation and interest rates could make the financial side of things a lot less daunting.
What Buyers and Sellers Need to Know
If you’re a potential buyer, you might be tempted to jump in now that mortgage rates are a bit kinder on the wallet. Andrew Lloyd, managing director at Search Acumen, says homebuyers are keen to take advantage of these more favourable deals.
This shift could make higher-priced homes more accessible, driving further market activity. But it’s not all plain sailing. While more affordable mortgages are helping boost sales, house prices are still high, and many buyers are still grappling with affordability concerns.
Reality Check for Sellers
On the flip side, sellers need to be realistic about their asking prices. Jason Tebb, president of OnTheMarket, has highlighted that while improved mortgage rates are a win for buyers, sellers who want to offload their properties quickly should be careful not to overestimate what their home is worth. Pricing too high could scare off potential buyers who are still adjusting their budgets to these new mortgage conditions.
So, what’s the takeaway?
The housing market is showing signs of resilience, and it’s definitely picking up compared to this time last year. But there’s a balance to be struck. If you’re selling, keeping your price expectations in check could be key to finding the right buyer before the end of the year.
What’s Next for the Market?
Looking ahead, it seems likely that we’ll see continued steady growth rather than any dramatic spikes. If inflation continues to fall and mortgage rates stay competitive, more people might feel confident making a move, whether that’s buying their first home or trading up.
But it’s a tricky dance between affordability and market momentum. Lower interest rates can only go so far in helping people manage the costs of homeownership, especially when house prices are still relatively high. That said, the fact that the market is gaining traction now suggests that there’s a foundation for cautious optimism.
So, if you’re looking to buy, it might be a good time to start seriously considering your options before interest rates start to shift again. And for sellers, the advice is clear: price wisely, and you could be catching the wave just as the market finds its stride.
In any case, August’s figures are a promising sign. With a few more months left in 2024, there’s still time for more positive news on the horizon. For now, though, the housing market seems to be shaking off last year’s struggles and getting back on track – slowly but surely.