Bank of England Rate Cut Spurs Housing Market Surge, UK House Prices Rise by £2,200 in July
August 8, 2024The Bank of England recently cut its base interest rate from 5.25% to 5%, marking the first reduction in four and a half years.
In response to this rate cut, major banks such as Halifax, NatWest, and Santander have lowered their mortgage rates by up to 0.20 percentage points.
These sub-4% mortgage rates have significantly boosted buyer confidence, leading to increased activity in the housing market.
Sam Mitchell from Purplebricks noted that the lowered mortgage rates have spurred greater buyer engagement.
Halifax reported a 0.8% monthly increase in UK house prices for July 2024, following three months of stagnation.
The average UK house price rose by over £2,200 in July, reaching £291,268, which reflects a year-over-year growth rate of 2.3%.
This increase in prices marks a significant rebound after three months of minimal growth.
Iain McKenzie from the Guild of Property Professionals expressed optimism about the market, attributing it to lower mortgage rates and steady price growth.
Despite these positive trends, challenges such as affordability constraints and limited property availability persist for potential homeowners.
Financial planner Holly Tomlinson suggested that declining interest rates could encourage hesitant sellers to list their homes, potentially increasing market activity this autumn.
Amanda Bryden from Halifax indicated that lower mortgage rates may encourage more people to enter the housing market, further stimulating price growth.
Summary based on 3 sources
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Sources
The Guardian • Aug 7, 2024
UK house prices ‘to rise through rest of year’ after jump in JulyThe Independent • Aug 7, 2024
Average UK house prices rise more than expectedGround News • Aug 7, 2024
Average UK house price jumps by more than 2,200 in a month