Bank rate cut to boost recovery
The “better late than never” rate cut by the Bank of England serves to boost an already very busy property market, according to Home.co.uk’s Asking Price Index for August.
A likely prolonged period of falling mortgage rates will most certainly stimulate demand and come to the aid of the five English regions which have yet to recover their 2022 price highs, the property website found.
Home price growth overall will remain moderate while high stock levels persist. However, considerable regional variation is apparent, and the already vibrant inflation-beating northern markets (e.g. the North East) will potentially move into overdrive in the near term.
The East of England and Greater London still have considerable ground to make up before they return to their 2022 price highs. Home.co.uk expects recovery to remain slow despite the recent rate cut due to these areas’ relatively poor rental yields.
Meanwhile, the northern, Scottish and Welsh markets have long since surpassed their 2022 highs and are indicating inflation-beating growth. Their prospects have just improved further thanks to the rate cut.
Overall, key market indicators confirm that the UK property market is in good shape and looks set to prosper as borrowing costs steadily decline.
Typical Time on Market is slightly lower than in pre-pandemic August 2019 and annualised price growth is significantly better overall despite the poor performance of several regions, predominantly in the South and East.
A key driver of current growth is buy-to-let investment focused on the best yields available and this correlates with the more vigorous northern markets.
The mix-adjusted average asking price for England and Wales increased by just 0.2% during the last month and, although 1.2% above the August 2023 figure, it remains 0.6% below the all-time high of August 2022.
