Navigating the property market will always, ultimately, come down to personal circumstances however recent reductions in the Bank of England base rate have led to a lot of people asking us if we expect to see a rise in house prices in the very near future.
In short, yes we do…but here’s why:
Property prices started to increase in July after a dormant few months, driven in part by economic and political factors. This is coupled with interest rates dropping to 5%, which is the first time we’ve seen a drop in interest rates since the beginning of the COVID-19 pandemic back in March 2020.
Despite the drop, mortgage rates are still significantly higher than they have been in recent history and that means that homeowners who are due to refinance their home could be facing a significant increase in costs than they would have in pre-pandemic Britain.
All of which points to either more people selling or the drop in rates being taken as a prompt to make a move in the property market, rather than running the risk of rates climbing again.
Lower rates mean greater affordability on higher value mortgages and therefore we’re likely to see a mixture of more buyers entering the market with greater initial spending power, more homeowners considering selling in order to downsize instead of remortgaging at a higher rate than they’ve been paying and generally more optimism around the market as rates drop.
We have also seen high street lenders publish data showing that the average cost of a property in July 2024 was £291,268, which is up by more than £2,000 compared to previous months this year and indicates a 2.3% increase in house prices compared to the same time last year.
So are house prices going to keep rising?
We’ll have to wait and see but our prediction today is that they will, providing the interest rates on mortgage products and the Bank of England base rate keep falling as expected.
What do you do next?
If you are selling or buying a property, Talbots Law are award-winning conveyancers supporting more than 20,000 people through their property transactions every single year. Which basically just means, we’re here to help!
Call us on 0800 118 1500 or email newbusiness@talbotslaw.co.uk to get a free, no-obligation quote for your move.
DISCLAIMER: the contents of this blog or any other published by Talbots law cannot be considered as legal advice and should therefore not be acted on without prior consultation with a qualified solicitor or legal professional.