The latest data from Rightmove shows that the average asking price for new homes has increased by 0.8%, or £2,974, bringing the average price to £370,759. This rise is double the long-term average for this time of year. The main reason for this jump is that there has been a noticeable increase in activity in the housing market. This uptick in activity has been helped by falling mortgage rates and a greater selection of homes available for buyers to choose from.

Even with this positive movement, the market remains careful. Buyers are still looking for the best value and are taking their time to make the right decision. Many potential homeowners are aware of the uncertainties ahead, especially with talks of changes in tax rules.

What’s Coming Next: The Autumn Statement

Everyone is now looking ahead to the Autumn Statement. Rightmove’s data suggests that some parts of the market are already reacting to the expected rise in capital gains tax. One clear sign of this is the record number of former rental properties now listed for sale. This indicates that many landlords are deciding to sell their properties before any tax increases are officially announced.

Industry Experts Share Their Thoughts

Industry professionals have a lot to say about the current housing market situation. Here’s what some key players are thinking:

Nathan Emerson, CEO of Propertymark, is optimistic about the recent rise in housing market activity. He mentions that now that mortgage affordability has improved, it has brought more confidence to consumers. However, he notes that inflation figures, which are due out soon, will have a significant influence on the upcoming interest rate decision. He adds that while Propertymark hopes to see more reductions in base rates, it’s important to consider how the upcoming budget at the end of next month may impact the housing market. Emerson suggests that some buyers may be hurrying to complete purchases before potential changes to the tax structure are announced.

Tom Bill, head of UK residential research at Knight Frank, agrees that falling mortgage rates have encouraged both buyers and sellers to be more active this autumn. He predicts that the final quarter of the year could be the strongest one in the past three years. However, Bill warns that the biggest uncertainty is the upcoming budget, which may lead to tax increases. He also points out that many homeowners who previously locked in favorable mortgage rates will soon have to switch to higher rates. While he expects transaction numbers and demand to rise, Bill advises sellers to manage their expectations as buyers may not be as eager as they once were.

Jason Dainty, co-founder of Hopkins & Dainty in Derbyshire, is seeing good levels of activity as the market enters the autumn season. Typically, the market slows down during the summer as people go on holiday, but Dainty notes that sellers are now coming back to the market in greater numbers. He says there’s a positive sentiment among both buyers and sellers. However, Dainty emphasizes that homes need to be priced correctly to attract interest. Properties that are priced too high are likely to be overlooked. Still, he remains hopeful for a strong finish to the year as autumn begins.

Buyer Confidence on the Rise

In London, Tony Gambrill, regional sales director at Chestertons, highlights the high demand from buyers. He explains that the capital’s property market experienced an unusually busy summer, with sellers maintaining the upper hand during price negotiations. This surge in buyer confidence was driven by lower interest rates and mortgage rates, which made it easier for people to buy homes. Gambrill believes that this strong buyer confidence will continue into the autumn, keeping demand high for the foreseeable future.

Meanwhile, Sam Mitchell, CEO of Purplebricks, expresses concern about the upcoming budget. He believes that the housing market’s recent momentum could be at risk if capital gains tax (CGT) is increased as expected. Mitchell explains that mortgage rates are currently at their lowest point in 18 months, and the number of homes listed for sale is at a multi-year high. These factors, combined with a period of political stability, have encouraged buyers to move forward with their purchases. However, Mitchell warns that a rise in CGT could reverse these positive trends. He refers to the CGT hike as an “anti-landlord tax” and notes that many landlords are already selling off their properties in anticipation of the tax increase. This sell-off could lead to even higher rents and make it harder for first-time buyers to enter the market. Mitchell suggests that instead of raising CGT, the government should introduce incentives such as tax breaks for landlords who sell their properties to tenants or first-time buyers.

Adam Feather, managing director at Robert Anthony Estate Agents, shares a more positive outlook. He observes that homebuyers are becoming more confident thanks to easing interest rates. Feather is seeing increased activity across all price ranges and believes this positive growth will continue in the near future as homes become more affordable for a larger number of people.

The Road Ahead

In conclusion, the housing market is showing signs of growth, supported by lower mortgage rates and an increase in property listings. However, there is still caution in the market, especially with the upcoming budget and potential changes to tax rules. Many buyers are taking their time to find the right home at the right price, and sellers need to be realistic with their pricing to attract interest.