Of all the factors influencing the decision to buy a new home, economic prospects and direction of travel for interest rates have played an important role, often recognised as having the biggest impact.
The Bank of England’s Monetary Policy Committee voted, by a substantial majority, to reduce the Bank Rate from 5% to 4.75% last week. The reduction should give buyers a significant confidence boost as, together with the 0.25% fall in August, it points to an ongoing trend. Economists at Golman Sachs predict interest rates are on course to fall to 2.75% by November 2025.
With inflation running at 1.7%, well below the Bank’s 2% target, the reduction was widely expected by the money markets and means lenders have mostly priced in the cut into their mortgage rates. More than one million borrowers on tracker and variable deals will see more immediate falls in their monthly bills.
The Bank of England’s most recent Money and Credit Report revealed net mortgage lending has further increased by 0.9% in September, up on the 0.7% seen in August. Coupled with proposed changes to Stamp Duty thresholds from next April, it’s highly likely we may see buoyant activity in the market across the winter months.
Nationally, the number of sales agreed in October were up 8% on September and up a massive 32% on October last year. Let us not forget in October 2023 we had hit the peak of interest rates and inflation was still running at 4.6%. New sales were recorded 6% higher than the six-year average for October.
The Autumn Budget has come and gone. Much like historical data surrounding most budgets, activity slows in anticipation and then there is a slight post event bounce. We expect the exact same with this budget and here are our property related takeaways:
- Stamp Duty Land Tax for additional homes increases from 3% to 5%.
- Capital gains tax on residential property remains unchanged at 18% (basic rate) and 24% (higher rate).
- VAT added to private school fees from 1st January 2025.
- Inheritance Tax threshold of £325,000 remains, with higher allowances for spouses, civil partners, and children.
- Extra £500m invested in the Affordable Homes Programme.
We feel this timeline from Housemetrick.co.uk is a useful tool to see how major events over the last two decades have affected number of properties sold. This years Autumn Budget was not a major event.
According to Rightmove, the number of people sending enquiries to estate agents about homes for sale this autumn is up 17% and Zoopla measure a 22% rise in buyer demand on autumn 2023.
The number of homes advertised for sale is still at a 10 year high. Please remember it remains a very price sensitive marketplace where only serious, realistic and flexible sellers presenting a competitively priced property, are attracting value-conscious buyers to take action.
Lastly, according to the latest Rightmove House Price Index, it is currently taking sellers 61 days to find a buyer and a further 152 days to get a sale through to completion. Thats over 7 months from the day you launch your property to the day you hand the keys to the new owner. If you agree to sell your house in November or December this year, your estimated completion date will be June – July 2025.
On one sale, we helped the owners of a home on Ragged Hall Lane in St Albans, exchange contracts this week and the sale completes in December. That’s 3.5 months after the house was initially advertised, less than half the average time to sell.
Please don’t hesitate to get in touch for a confidential discussion about how this was possible and advice on how you can improve your chances of selling for the best possible price, and minimise the time it takes. Call the office on 0300 043 4655 or CONTACT US HERE.
Thanks for reading.
Scott
P.S. Is the “Boxing Day Bounce” real? Then after the Christmas break is spring the next best time to re-launch your property to the market? Get in touch for the real data and statistics, so you can make the best-informed decision for your future.
