UK property demand rises following Bank of England rate cut

British estate agents have reported increased buyer demand following the Bank of England’s decision on August 1 to begin cutting interest rates from a 16-year high, according to property website Rightmove.

Buyer enquiries in August were up 19 per cent year on year, an improvement from July’s 11 per cent increase.

Rightmove’s director, Tim Bannister, noted that while mortgage rates have not dropped significantly yet, the initial rate cut and the anticipated downward trend in rates have positively impacted home-mover sentiment.

The average interest rate on a five-year fixed-rate mortgage now stands at 4.80 per cent, down from 5.82 per cent a year ago.

The average asking price for new property listings between July 7 and August 10 decreased by 1.5 per cent to £367,785 ($474,663), reflecting the typical August lull. However, prices were up 0.8 per cent compared to a year earlier, an increase from July’s 0.4 per cent rise.

Official June data shows property prices were 2.7 per cent higher year on year, marking the joint-largest increase since March 2023. Financial markets anticipate at least one or two additional quarter-point rate cuts by the end of the year.

Attribution: Reuters

Subediting: M. S. Salama