The UK housing market has received a significant boost following the Bank of England’s recent decision to cut the Base Rate to 5%—the first reduction in four years. This long-awaited move has sparked renewed optimism among home-movers, with Rightmove reporting a surge in buyer interest across the country.
According to Rightmove’s real-time data, the number of potential buyers enquiring about homes increased by 19% year-on-year since the Base Rate cut was announced at the start of August. This jump in demand represents a substantial improvement from July, where interest was up 11% compared to the same period in 2023. The data suggests that this rate cut has reinvigorated the market, as many prospective buyers see this as an opportune moment to pursue their home-moving plans.
Tim Bannister, Rightmove’s property expert, commented on the development: “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, 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.”
While the reduction in the Base Rate has already had a noticeable impact on buyer activity, the full effect on mortgage rates is still unfolding. Although the lowest available 5-year fixed-rate mortgage is now at 3.83%—the lowest since the mini-Budget in September 2022—mortgage rates remain higher than a few years ago. Bannister advises sellers to remain realistic with their pricing, as affordability challenges persist for many buyers.
Despite a typical seasonal drop in asking prices this August—down 1.5% from the previous month to £367,785—Rightmove has revised its year-end forecast upwards. The property portal now expects house prices to end 2024 with a modest 1% increase, a significant turnaround from their earlier prediction of a 1% decline.
Bannister added: “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.”
This positive momentum suggests that the housing market could be in for a more stable and possibly prosperous end to the year, as the effects of the Base Rate cut continue to permeate through the market.
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Source: Rightmove News
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