Falling mortgage rates drive sentiment in property market to a two-year high
Recovery in the UK housing market is speeding up, according to the Royal Institute of Chartered Surveyors.
Estate agents are becoming increasingly confident in the UK housing market’s recovery. They anticipate a rise in sales in the coming months amid increasing demand and more stable house prices.
There has been a “rekindling” of new buyer interest in the housing market amid gradually falling mortgage rates and building anticipation of interest rate cuts, according to a closely watched survey from the Royal Institute of Chartered Surveyors (RICS).
The new buyer enquiries balance, which measures the difference in estate agents reporting a rise in buyer interest against those reporting a fall, rose to 8 points, the highest level since February 2022.
The RICS’s measure of house prices also hit its highest level since October 2022 at -4, up from -10 in February and the strongest reading since Liz Truss’s mini-budget.
Confidence among UK estate agents in the outlook for house prices is also on the up. The lionshare expecting prices to rise increased to 38 in March, up from 36 in February and the highest level since June 2022.
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said buyers and sellers were “emerging from an extended hibernation… Better weather is coinciding with much more interest than we have seen for several months.”
Daniel Austin, chief executive and co-founder at ASK Partners, said the outlook had “considerably improved.”
“Rent values have seen sustained growth, positioning real estate as reasonably valued in comparison to gilts and presenting growth potential.”
He added: “In the current market, the emphasis has shifted towards the importance of location and quality over the yield on debt or cost. We anticipate opportunistic acquisitions of prime properties in prime locations.”
Mortgage approvals jumped to their highest levels since the mini-budget in February, at 60,400, according to Bank of England figures released last week.
The Bank of England held interest rates at its last meeting but it suggested that rate cuts were on the table, with markets anticipating cuts to start in June.
There is still some volatility in the housing market, despite a steady recovery in recent months. Halifax last week said house prices had declined for the first six months, an announcement which surprised the market.
