August has been a strange month for the housing market, despite the Bank of England interest rate reduction, so far, we haven’t seen an immediate surge in activity compared to the months leading up to it. However, the market is in a completely different place to this time last year when there as no sign of interest rates even stabilising.
Compared to August 2023, the month when interest rates were last increased, the market has significantly improved with a noticeable change in confidence and activity. According to Rightmove data, nationally 5% more sellers have placed their properties on the market compared to this time last year, buyer enquiries are up by a massive 19% and sales agreed are up by 16%. This data is encouraging and emphasises the corner the housing market turned in the first quarter of the year.
Rightmove also quote that asking prices in Northamptonshire are down by 0.6% compared to this time last year. This isn’t a surprise as sellers are becoming savvy and understanding overpricing will not generate foot fall. It is also fair to say that the number of properties available for sale locally is hindering prices, particularly the number of brand-new homes available.
Within our business we feel the better weather and holidays have contributed to a mini lull in activity this month and feel once the holiday season is over, the children return to school and more normal routine resumes, we expect that in September we will see the benefit of the interest rate reduction.
Currently there are some far better mortgage rates on offer than we have seen in recent years, some lenders are offering 5-year fixed rate deals at less than 4%, albeit at 60% loan to value with an upfront fee. Overall, things are moving in the right direction and this lower cost of borrowing is helping with affordability and confidence.
As the sales market continues to recover the rental market is slowing; rents have soared over the past couple of years, to the degree that many people now cannot afford to rent or don’t qualify to meet affordability and referencing criteria. As we monitor the local rental market, many overpriced rentals are sticking and price reductions are becoming more commonplace, something which was rare a year ago.