UK real estate sellers have observed a significant increase in buyer demand following the Bank of England’s decision on August 1 to lower interest rates from their highest point in 16 years, as reported by the real estate website Rightmove on Monday. Rightmove, which claims to advertise properties for more than nine out of every 10 real estate agents in the UK, noted that the number of buyer inquiries in August was 19% higher than the same period last year, compared to an 11% annual increase in July.
Tim Bannister, Rightmove’s director of property science, commented,
“Although mortgage rates have not yet been substantially lower since the interest rate cut, the fact that the long-awaited first cut has finally come, and mortgage interest rates are trending downward, is positive for home buyers’ sentiment.”
After the rate cut, Andrew Bailey, the governor of the Bank of England, stated that mortgage interest rates had already begun to fall and that the central bank would exercise caution in lowering interest rates too quickly. Financial markets anticipate at least one and possibly two further interest rate cuts by the end of the year.
The average interest rate on a five-year mortgage has now decreased to 4.80%, down from 5.82% a year ago when the Bank of England had raised interest rates to their peak of 5.25%, according to Rightmove.
The average asking price for newly advertised properties on Rightmove between July 7 and August 10 was 1.5% lower than the previous month at £367,785 ($474,663), which is typical for August when there is usually a lull in activity. Asking prices were 0.8% higher than the previous year, compared to a 0.4% annual increase the previous month.
Official data based on sales completed in June showed that prices were 2.7% higher than the previous year, marking the second-largest increase since March 2023.
