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Banks (Finance)

Bank of England Rate Cut Boosts Buyer Activity, Estate Agents See 19% Jump in Contact Requests

Strategic Insights

— 1 min read

The Bank of England's rate cut has led to an immediate surge in buyer activity, with estate agents reporting a significant increase in inquiries about homes for sale. According to Rightmove, buyer activity has jumped 19% since August 1, compared to the same period last year. This uptick is particularly notable, given the housing market's sluggish performance in 2023, largely due to high interest rates and the cost-of-living crisis. The rate cut has also led to a slight decrease in the average asking price of new sellers, but Rightmove attributes this to the seasonal trend of sellers delaying home-moving plans during August to go on holiday.

Key Takeaways:

  • The 19% jump in buyer activity since August 1 is a significant increase, representing a 7% rise compared to the 11% year-on-year uplift seen in July.
  • The Bank of England's monetary policy committee voted to reduce the base interest rate to 5%, a quarter-point cut, marking the first rate cut in four years.
  • Rightmove has revised its yearly house price forecast from a 1% drop to a 1% rise, citing the rate cut as the driving force behind this revision.
  • Tim Bannister, Rightmove's director of property science, attributes the rate cut to a "welcome late summer boost in buyer activity" and believes the conditions are now set for a more active autumn market.
  • The average five-year, fixed mortgage rate has decreased to 4.80%, with the best available five-year fixed rate now standing at 3.83% for those with a 40% deposit.

Statistics:

  • 19%: The increase in buyer activity since August 1 compared to the same period last year.
  • 11%: The year-on-year uplift in buyer activity seen in July.
  • 1.5%: The average monthly drop in the new-seller asking price across the UK in August.
  • PS5,708: The monthly drop in the average new-seller asking price in August.
  • PS367,785: The revised average new-seller asking price across the UK as of August.
  • 4.80%: The current average five-year, fixed mortgage rate.
  • 5.82%: The five-year, fixed mortgage rate at this point in 2023.
  • 3.83%: The best available five-year, fixed mortgage rate for those with a 40% deposit.

Sources:

  • Rightmove
  • Bank of England

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