UK Housing Market Sees Seasonal Dip Amid Mortgage Rate Adjustments
As December unfolds, the UK housing market is experiencing its customary seasonal slowdown, with average property asking prices decreasing by 1.7% to £360,197. This decline, amounting to a reduction of £6,395, marks the second consecutive month of falling prices, following a 1.4% drop in November.
Despite this downturn, market activity remains robust. Sales agreements have surged by 22% compared to the same period last year, indicating sustained buyer interest. This uptick is partly attributed to buyers expediting purchases ahead of anticipated stamp duty changes set for April.
Mortgage rates have played a pivotal role in shaping current market dynamics. Lenders such as Barclays, NatWest, and TSB have recently reduced their mortgage rates, with NatWest cutting its two and five-year fixed-rate mortgages by up to 0.39%. These adjustments have enhanced affordability for potential buyers, contributing to increased market activity.
Looking ahead, Rightmove forecasts a 4% rise in asking prices for 2025, driven by expected declines in mortgage rates, improved buyer affordability, and the release of pent-up demand. The Bank of England’s upcoming meeting is anticipated to maintain the base rate at 4.75%, with potential rate cuts in 2025 poised to further stimulate the housing market.
In summary, while the UK housing market is experiencing a seasonal dip in property prices, the combination of lower mortgage rates and sustained buyer interest suggests a positive outlook for 2025. Prospective buyers and sellers should stay informed about market trends and policy changes to navigate the evolving landscape effectively.
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