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The housing market in the UK appears to be on the rise as house prices are anticipated to go up this year based on the recent report from Knight Frank which suggests that attractive mortgage rates and a potential interest cut by the Bank of England may contribute to the price hike.
The Changing Scene of the Market
Following a drop in the year 2023 that saw a consistent decrease in house prices; the markets future’s looking brighter. Knight Frank adjusted its prediction in May from a 4 percent decrease to a 3 percent increase in house prices for 2024. This change is mainly attributed to the decrease in inflation and the potential for interest rate reductions. The recent rate reduction since March 2020 and an upcoming general election have instilled confidence, among both buyers and sellers.
Tom Bill from Knight Franks UK residential research division mentioned that their predictions seem to be heading in the right direction; with the recent changes in government and interest rates have noticeably influenced the overall atmosphere. Despite this outlook by Knight Frank as they await the effects of the upcoming Budget announcement, on October 30th current indications point towards a market that is gradually picking up speed.
The intense competition among mortgage lenders is boosting the confidence of home buyers. The continuous decrease in mortgage rates to below 5% sparked by a pricing battle among lenders following the recent interest rate adjustment from 5.25 % to 5% has driven a notable surge in the availability of mortgages priced below 4%. This attractive offer is anticipated to draw in a pool of prospective homebuyers.
Simon Gammon from Knight Frank Finance points out that this may result in a rise in demand and sales numbers in the housing market sector. With inflation showing signs of steadying and expected reductions in interest rates on the horizon the accessibility of mortgages is likely to improve. This positive trend could attract new home buyers as well as individuals planning to upgrade their current properties.
The Impact on Homeowners and Potential Buyers
Homeowners could view the rise in housing prices as a chance to boost their properties worth and possibly gain equity with the option to refinance at reduced rates easily accessible to them now. On the other hand for first time buyers and those stepping into the market anew, the availability of more affordable mortgages brings a hopeful outlook. It hints at a decrease in hurdles to owning a home compared to previous years making this period an attractive window to contemplate property investment.
Home Legal Direct sees this as a sign of a strong market where financial institutions and government actions are helping to stabilise and boost growth efforts effectively in place well ahead, for both buyers and sellers as these patterns persist.
Although the current perspective appears positive at the moment; there are elements that might impact the market in the future. In particular; potential adjustments to taxes. Those related to capital gains and inheritance and upcoming modifications in the rental sector could potentially sway investor sentiment and buyer actions.
However the overall feeling stays optimistic according to Tom Bill from Knight Frank who mentions that the upcoming three months will shed light on the UK housing market’s future compared to the past three months.
At the moment with the scenario of decreased mortgage rates, a possible decrease in interest rates and a growing positive outlook towards the market, it appears likely that UK housing prices will experience a slight yet significant rise by the end of the year..
In summary
The UK housing market seems to be picking up pace which could make it a good moment to think about what comes next for you. Whether it’s getting your first home or selling a property you already own. It’s important to stay updated and prepared so that you can make moves as things change in the market.