August Property Market 2024

Market Activity Measures are Rising

Many key market activity measures are higher than in 2023, largely supported by economic growth and rising buyer confidence. One measure that has largely risen is the housing demand, rising a fifth compared to last year. Additionally, sales agreed are up by almost 25%, further strengthening the increasing flow in sales from earlier in 2024. And the number of new sellers in the market is now an impressive 5% ahead of this time last year.

The number of houses for sale has continued to increase and is now at a 7-year high of an average of 33 homes per estate agent, allowing buyers to have wider options. A higher supply of homes will keep price inflation stable over 2024, encouraging more market activity. Sellers in the current market must price their property fairly to be able to sell within a reasonable time.

The Market Since The Base Rate Cut

On the 1st of August, the Bank of England cut the base rate, which led to the number of buyers wanting to view homes growing by 19%. This is compared to a quieter period in 2023 when the market was dealing with the consequences of high inflation rates and peak mortgage rates.

However, this improvement in buyer demand shows the immediate impact of the Bank of England base rate cut. Many agents note that increased political stability and a more positive economic outlook are also boosting buyer demand.

Due to the above factors, combined with other encouraging market data, Rightmove has revisited its end-of-year price predictions. Changing their predictions from a 1% decrease in asking prices, to a 1% rise over 2024. There is expected to be minor price growth in autumn, with the usual seasonal decline in prices towards the end of the year.

Mortgage Rates are Decreasing

Mortgage rates have continued to fall, the average five-year fixed mortgage rate now stands at 4.80%. Even though this still seems high, compared to the first of 14 Bank Rate increases resulting in a rate of 5.82% in 2023, it is a significant decrease.

Rightmove’s mortgage analysis shows that the best 5-year fixed rate currently available for those with a 40% deposit is 3.83%. This is the lowest 5-year fixed rate since before the mini-budget in late 2022.

Asking Price Cuts are Reducing

Zoopla’s research found that 1 in 5 homes put up for sale in August have reduced their asking price by 5% or more to create more interest, due to the larger supply of houses available. This is above the average price cuts, but way lower than the 23% high recorded last autumn. There were large cuts in asking prices in late 2023 because higher mortgage rates hit demand and house prices dropped. The small reductions in asking prices show continued price sensitivity among buyers.

On average, it takes 28 days to sell a home without reducing the asking price. However, if a price reduction of 5% or more is needed, the selling time increases to 73 days. Therefore, to sell quickly, sellers should ensure their home is competitively priced in the market from the start.

In August, average asking prices saw a seasonal decline of 1.5%, or approximately £5,708, bringing the average asking price to £367,785. For the past 18 years, property prices have typically decreased from July to August. This month’s drop aligns with that long-term trend.

House Prices Continue to Grow

There is a continued slight rise in house prices due to the fact there is a growing number of sales agreed alongside buyers paying a higher percentage of the original asking price of a property.

So far research shows that the UK average property price has grown by 1.4% in 2024, however is predicted to reach a growth of 2.5% by the end of 2024. Based on the past 12 months, the rise in house prices is currently lower than the rise in 2024, with an increase of 0.5%. This is because it takes into account the price falls that were seen towards the end of 2023.

Over the last decade, house prices have only recorded a fall in Q3 and Q4 2022 and Q4 2023. These falls were all due to the higher mortgage rates. So with mortgage rates lowering, we could expect to see steady price inflation.