The real estate market is preparing for a “very busy” autumn, according to experts: here’s why

This time of year is typically slow for the property market as the summer holidays dampen demand, and 2024 is no different.

But once September rolls around, it’s entirely possible there will be a significant surge in buyer interest, more than usual, according to many property experts.

There are a couple of factors that make this scenario feasible. The election is over and we have a new government, the big lenders are making decent mortgage rate cuts, and home prices are holding steady.

The aforementioned stability may mean that more potential sellers, who have been sitting on their hands, may be tempted to post and take the plunge.

Data from the Office for National Statistics this week shows just how low transactions have been so far this year, compared even with last year. There has been a slow pace.

I keep track of properties listed in my area through a couple of online portals, and it’s been a gradual trickle of information, rather than the usual deluge of the past 12 months.

I personally know a few friends who have been putting off purchasing for fear of higher mortgage rates than they were used to.

But the best mortgage rates are now back below 4 percent, which is a reassuring sign.

The consumer price index, a measure of inflation, rose slightly this week to 2.2 percent, but core inflation eased slightly, slightly better than expected.

Markets remain divided on whether there could be further base rate cuts this year, but we are heading in the right direction and that appears to be enough to spur competition among lenders.

Mortgage rates could continue to fall. Not by 1 or 2 percent, but much better than we have seen in recent times.

What does rising inflation mean to you?

Where can you get savings rates that beat inflation?

Three of the biggest names (in my opinion) in property and mortgages were upbeat with their comments on this week’s ONS and inflation data, as I outline below.

ONS data shows house prices at £288,000 have recovered to a similar level to last year, but are still £7,000 below the peak in summer 2022.

But they have risen for five consecutive months, up £8,000 since the start of the year.

In short, double-digit price declines are often predicted (think of the pandemic and more recently when mortgage rates began to rise rapidly). Yet these declines seemingly never occur.

Andrew Montlake, managing director of mortgage broker Coreco, said: ‘The resilience of the housing market over the past year has been remarkable.

“The double-digit price falls that many had predicted have simply not materialised. Since the base rate was cut earlier this month, and with mortgage rates continuing to fall, we have seen an increase in demand. We are preparing for a much busier autumn.”

David Hollingworth, associate director at L&C Mortgages and This is Money columnist, echoes the potential surge in demand and believes mortgage rates need to fall further.

He added: ‘In a cutthroat market, rates have already fallen further and a group of large lenders are now offering five-year fixed rates below 4 per cent, levels not seen since much earlier in the year.

That direction of travel is unlikely to be altered by the reaction to today’s inflation reading and the market will have been well prepared for a rise.

‘Instead, we are likely to see continued and frequent movements in mortgage rates, as lenders continue to adjust and improve where they can.

‘Lower interest rates have generally been offered to those buying a new home. As the interest rate outlook improves, this should help to regain some of the confidence that has been severely dented by the rapid rise in interest rates in recent years, leading to a more sustained recovery in activity over time.’

Looking at the dozens of responses from estate agents in the Royal Institution of Chartered Surveyors’ report earlier this month (a task I undertake religiously every month to get a snapshot of the mood across the country), there are plenty predicting a strong autumn.

Much of the commentary on an improving outlook mentions that falling mortgage rates would unblock the market.

RBC Capital Markets’ Anthony Codling says: ‘With mortgage rates starting to fall and further bank rate cuts likely, we think house prices will continue to rise in the second half of the year.

‘We feel that the market will enjoy a buoyant autumn sales season and that homebuilders will have a strong second half and enter 2025 with very healthy order books.’

Don’t be surprised to see home prices ticking up slightly, mortgage rates continuing to fall, and plenty of sellers eager to pull the trigger and list their property for sale.