Home movers maintain market stability amid election and Euro 2024
The average price of property coming to market has fallen by 0.4% to £373,493 in July, according to property listing platform Rightmove.
The drop exceeds the 20-year July average of -0.2%, as sellers seek to attract buyers with more competitive prices amid the summer holidays and the Olympics.
Despite recent events such as the general election and the Euro football tournament, homemovers have maintained overall stability, with prices 0.4% higher than a year ago.
Concerns that the general election campaign would significantly slow home-moving activity have proven largely unfounded, with Rightmove’s latest House Price Index indicating that the majority of people continued with their moves post-election.
The new government is expected to bolster home-mover confidence in the latter half of the year. However, the key concern remains the timing of the first interest rate cut, as high mortgage rates continue to impact affordability.
Tim Bannister (pictured), director of property science at Rightmove, highlighted the major uncertainties affecting the property market.
“We’ve now got the political certainty of a new government with a large majority, which we expect will help home-mover confidence,” he said. “It’s very early days, but the new chancellor’s immediate announcements on housebuilding targets and planning reform are positive signs that the government is keen to get going with its manifesto pledges.
“With many areas of the market that could be improved, we hope that the new government is able to get on with its plans and deliver sustainable housing policies that help the market in the medium- to longer-term.
“One area of the market in need of more support is first-time buyers, many of whom have been stretched to the limit by high mortgage rates, with some also facing higher stamp duty fees when the current thresholds are set to revert in March 2025.”
Sales agreements have risen 15% compared to the same period last year, up from last month’s figure of 6% above last year, suggesting that serious home-hunters remain undeterred by the general election. New seller numbers are also steady, 3% higher than last year, indicating that most movers continued their plans despite electoral uncertainties.
Overall buyer demand has remained stable over the past four weeks compared to last year, though the first-time buyer sector saw a slight decline of 2% in demand due to affordability challenges. The financial markets expect the first base rate cut to occur in August or September, which could boost home-mover sentiment into the autumn.
“As expected, the housing market has stood firm despite the political uncertainty of a looming general election, even though a marginal reduction in asking prices suggests a point of consideration among some buyers and sellers,” said Guy Gittins, chief executive of Foxtons. “Thankfully, England’s EURO 2024 progress does not seem to have been a similar distraction.
“It’s already abundantly clear that now the political dust has settled, the post-election market is seeing a notable increase in activity in the few short days that have followed. It’s now a case of ready, set, go for the nation’s buyers and sellers, and we expect market momentum to continue to strengthen over the summer, especially with the prospect of a rate cut due in September, which could release even more pent up buyer demand – particularly at the one million pound and above price threshold.”
Rightmove’s mortgage tracker shows the average five-year fixed rate at 4.97%, down from the peak of 6.11% in July 2023, but still significantly higher than the 2.51% average in July 2021 before consecutive base rate increases began.
“A first base rate cut for over four years, together with the new political certainty, could set the scene for a positive autumn market, with improved affordability and a more confident outlook in the second half of the year,” Bannister said.
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