Are these house price rises a short-term blip or a sign of things to come for the UK property market?
The key aspect affecting house prices in the UK is the cost-of-living crisis and higher interest rates. However, the Bank of England has halted interest rates for two months in a row. While inflation still sits at 6.7%, it is expected to fall in October and potentially drop below 4% by the middle of 2024. In addition, some forecasts predict the interest rate to fall to 4.75% by the end of 2024.
These predictions indicate that the UK economy will become more stable moving forward. With stability comes an incentive to spend in the housing market again. While supply may be down, the current stats will allow sellers to be more confident that they can achieve a better price for their property than they would have earlier this year. In addition, buyers may feel more confident in taking out mortgages for their property purchases.
Nicky Stevenson, managing director of Fine & Country, explains:
‘Steady buyer demand has helped to provide a cushion against month-on-month price falls, and the housing market remains in a relatively stable position. There are more promising signs ahead, thanks to the recent pauses in interest rate rises.
Many buyers searching for their next home need stability in the mortgage market so they can trust that their affordability won’t change substantially while they’re viewing properties — and the Bank of England has now provided that extra dose of confidence.’
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