Rightmove has revealed its house price index figures for March, and they show that the UK housing market could be back on track.
Although house prices have softened over the past year, rising mortgage rates and the cost of living squeeze have led many homebuyers and investors to revise their plans. However, now it seems there is a window of opportunity for buyers to benefit from more favourable conditions.
So, what is happening in the UK housing market, and how will the changes affect your plans to buy a home or invest in property? This month, our market-savvy estate agents in Wanstead and Ilford have taken time to look at the key factors affecting London property sales.
Will house prices continue to rise?
In its latest update, Rightmove reports that UK house prices rose by 1.5 per cent in March. That’s the largest increase seen in ten months, going beyond the typical ‘spring bounce’ price rises we can expect at this time of year.
Rightmove has also shown that since the beginning of March, the number of sales agreed has increased by 13 per cent (compared to March 2023). The region that saw the biggest demand from buyers was London. Falling inflation, rising wages and more workers returning to the office are believed to be driving this trend.
So, will property values continue to rise? In their latest survey, business and consumer confidence experts GfK found that consumers’ confidence in their personal finances has hit the highest level in two years. At the same time, Zoopla has detected ‘improving sentiment’ in the housing market based on a stable employment market and faster wage growth.
No one can accurately predict what will happen to prices in the next few months. However a wide range of trusted sources have indicated positive progress for the UK housing market. Given the latest figures, earlier predictions that prices would continue to drop in 2024 may be in line for revision.
What’s happening to mortgage rates?
Today’s mortgage cost increases are the direct result of high inflation. For almost two and a half years, the Bank of England has been edging up the base rate – which affects the cost of mortgages – to combat rising inflation. The base rate currently stands at 5.25 per cent.
Inflation has now fallen to 3.40 per cent, but the Bank wants it to drop to just 2 per cent before taking action. Recently, a panel of financial experts predicted that if inflation continues to fall, the long-awaited cut will happen in June 2024.
In anticipation of a base rate reduction, mortgage lenders have reduced the cost of some mortgage deals. Consumer website Moneyfacts reported that 6,000 mortgage products were available in early March, giving homebuyers the widest choice since 2008.
Not only are mortgage lenders beginning to come up with cheaper deals, they are also extending the range of products, including extra incentives such as cash back offers.
Have things improved for first-time buyers?
Higher wages, lower property prices and the falling cost of mortgages should help first-time buyers take that initial step on the property ladder.
There are also a number of schemes available for first timers:
- You could buy your first home with a 5% deposit under the Mortgage Guarantee Scheme.
- First-time buyers in England can get discounts of 30% to 50% on new-build homes with the First Homes scheme.
- Shared Ownership allows homebuyers on low incomes to purchase a stake in a home while also paying rent.
- With a Lifetime ISA, you can top up your savings as you save for a deposit.
- You can also get a five-year interest-free loan to help you self-build a home costing no more than £400,000 with a Help to Build: Equity Loan.
What are the key takeaways for homebuyers and investors in 2024?
Consumer confidence is rising, demand is up and we are seeing more market activity than is usual for the spring season. After a relatively quiet year for the property market in 2023, Rightmove’s March house price figures suggest that it is beginning to pick up again.
There are now more mortgage products available at lower prices than recorded at the July 2023 peak of 6.86 per cent.
Homebuyers and investors are still able to take advantage of lower property values, but there’s no clear indication of how long prices will remain at such low levels.
If you would like to explore a fantastic range of properties for sale in Ilford, Wanstead and other popular areas of East London, why not give us a call? Our helpful agents keep track of the latest property insights to help you get the most from your budget. Alternatively, get in touch with our Ilford letting agents for landlord services or to find your ideal rental property.
Give us a call at 0203 972 7341 or email info@oaklandestates.co.uk.
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