The sellers are more optimistic and are generously showing their hands on new property listings in September after the Bank of England started with a quarter-point rate cut to 5% in August. The buyers are more daring, too. 

According to data released by Rightmove (*), the average asking price for UK homes in September was 1% higher than the previous month, at GBP 370,759 per unit.

Meanwhile, according to the lender Halifax’s data, average house prices in the UK rose 4.3% annually in August. Property prices are about to catch the June 2022 peak levels after two years of drawbacks (**).

How will the property market react further down the road?  

We highlight three significant factors in the autumn boost:

1. Estate agents and lenders expect the interest rates to fall further and the cost of mortgages to ease to 3% levels in 2025.
2. The Labour government will announce the new Budget on 30 October. Although tax policies concern the public, the hunt for growth will be the central theme of the Budget. The UK has been lagging in terms of growth for a long time.
3. The new housing pledge to build 1.5 new homes in the UK over the next five years will be a potent property market booster. However, it is also a strong indicator of supply shortage before the public observes the shovels in the ground. Demand for the existing housing stock should be maintained in the short term if the real wages are expected to show signs of expansion in 2025.

We expect more robust demand in the UK residential property markets in the last quarter of the year, which may lead to higher transaction volumes.

According to the Land Registry (***), average property prices in the UK rose by 25% over the last five years. Due to political stability and the government’s growth policies, we expect a better performance over the coming five years. Regional performances will vary, and eyes will still look for value elsewhere other than pricy London real estate, where there has been almost no price change in average property prices for the last five years.

We also expect ease in the race for space where post-pandemic effects at work pushing people to work from home may not be the case anymore. After the pandemic, we observed a shift to flexible working that created a demand for more space at home. This was coupled with the landlords exiting the market due to rising interest rates. The demand for spacious houses was high. But today, people are returning to offices more every day. And rates that have brought unrest to landlords may have peaked. Flats versus detached houses price increase rates may correct in favour of new flat block developments in the next five years. This will lead us to a fresh demand for flats in the cities and suburbs soon.