In September, UK house prices witnessed an uptick, driven by the early onset of the typically more active Autumn market. This trend followed the Bank of England's decision to cut interest rates, which subsequently lowered mortgage rates and boosted market confidence post-election, according to data released on Monday by property website Rightmove.
House prices increased by 0.8% on a month-to-month basis in September, a notable reversal from the 1.5% decline seen in August. On an annual basis, house price growth accelerated to 1.2%, up from 0.8% in the previous month.
Rightmove noted that while September generally experiences a rise in house prices, this year's increase is twice the long-term average, fueled by heightened market activity. However, the agency warned that the market remains cautious, emphasizing that correct pricing is crucial for a successful sale.
"The certainty of a new government and the first Bank Rate cut in four years re-energized the market, offering a window of opportunity for movers to act," stated Tim Bannister, Rightmove's Director of Property Science. "Some of this activity represents pent-up demand from those previously hesitant to make a move," he added. "However, sustaining this window of opportunity requires continual positive news, and uncertainties ahead could temper the current market momentum."
The data also revealed a 27% increase in the number of sales agreed between buyers and sellers compared to the same period in 2023. Additionally, the number of potential buyers contacting agents rose by 15%. The average number of homes available for sale per estate agency branch reached 33, the highest level since 2014.
Despite improved market conditions, properties are now taking an average of 60 days to find a buyer, three days longer than at the same time last year, indicating that buyers remain cost-conscious.
Looking ahead, Rightmove highlighted ongoing uncertainties, notably the Bank of England's upcoming decision on a potential second consecutive rate cut. In August, the Bank had lowered its benchmark rate for the first time since March 2020, reducing it by a quarter-point to 5.00%. The next policy announcement is scheduled for September 19.
