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Potential Rate Drop is Good News for Autumn Property Market

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    Average Asking Price Up 0.4% Annually in July

    Rightmove has recently published its latest House Price Index, covering property market data collected over July.

    The data shows that the average asking price has increased by 0.4% compared to this time last year, while on a monthly basis, it has slightly declined by 0.4%. The average new seller’s asking price in the UK now stands at £373,493.

    Rightmove’s research shows that the vast majority of people haven’t let the General Election slow down their property plans. Now that the election is over, the newly-found political certainty may boost the market further, giving more confidence to home-movers in the second half of the year and stimulating more buy-to-let investment.

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      Sellers Appeal to Distracted Buyers With Tempting Prices

      As mentioned, average new seller asking prices have declined slightly over July by 0.4% on a monthly basis. This is a drop of £1617 in cash terms, bringing the average cost to £373,493. Prices have dropped more than usually observed in July, but Rightmove states that this is likely due to the distractions of the General Election and sporting events this year, meaning sellers are trying harder to tempt buyers into the market.

      This seems to be working, as the number of agreed sales is 15% higher than last year. The number of new sellers in the market is 3% above last year. This shows that the uncertainty of the General Election hasn’t put off the vast majority of sellers and buyers.

      To learn more about the UK property market, take a look at our property investment guide.

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      Read more about this in our guide to the latest Savill's Residential Property Market Forecast and learn which UK regions to consider for buy to let investment.

      How Will a Base Rate Cut Affect the Autumn Market?

      Rightmove’s report states that one of the most pressing concerns in the current property market is the elevated interest rates, which are continuing to stretch affordability. Now, all eyes are on the Bank of England’s next meeting in August.

      According to Rightmove, financial markets expect the first Base Rate cut to occur in August or September. This is encouraging news, but these forecasts may change in the coming weeks. The first Base Rate cut in four years, combined with the renewed political certainty post-General Election, could set the backdrop for a booming Autumn market.

      Rightmove’s Director of Property Science, Tim Bannister, said: “A Base Rate cut is expected to lead to lower mortgage rates, which could be the game-changer for some would-be home-movers who are being held back by significantly higher monthly mortgage costs. The average five-year fixed rate is still nearly twice as high as it was before the first of 14 consecutive Bank of England rate increases in 2021, with rates staying elevated for much longer than many thought that they would. 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.”

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      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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