In the run-up to the rate cut and the Autumn Budget, many put their spending plans on hold as they waited to see how it would all pan out. It means there have been some very mixed signals coming from the housing market.

Rightmove’s data showed the average new seller asking prices rose by just 0.3% (+£1,199) to £371,958, well below the typical 1.3% October increase. However, the number of sales being agreed was up by an impressive 29% year on year.

Meanwhile, Nationwide’s data on completed purchases painted a slightly different picture, with house prices rising just 0.1% and annual growth slowing to 2.4%, down from 3.2% in September.

Tim Bannister, Rightmove’s Director of Property Science says: “This month’s subdued price growth comes as buyer choice soars to a level not seen since 2014. With the ball in the buyer’s court and the pick of a big crop to choose from, sellers need to be pricing competitively to find a buyer, particularly with affordability still very stretched.

“Despite post-budget uncertainties, the big picture still looks positive for the market heading into 2025, particularly now we’re seeing the anticipated base rate cuts materialise.”

And Robert Gardner, Nationwide’s Chief Economist adds: “Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching pre-pandemic levels, despite the significantly higher interest rate environment. Solid labour market conditions, with low levels of unemployment and strong income gains, even after taking account of inflation, have helped underpin a steady rise in activity and house prices since the start of the year.”

Reaction to both the budget and the rate cut has yet to fully feed through to the market and, although the rate cut will be welcomed by all in the sector, many are still digesting the full implications of the budget.

Rachel Reeve’s refusal to renew the stamp duty holiday when it comes to an end on March 31st 2025, however, is likely to have a more immediate impact on activity. From then on, first-time buyers’ nil rate band threshold will fall to £300,000 from £425,000, while for other residential buyers, it will drop to £125,000 from £250,000. This is expected to create a surge in transactions until the spring 2025, followed by a somewhat quieter period.

HOUSE PRICES AND STATISTICS

October has seen strong activity but more modest price rises, as buyers’ choices increase.

Nationwide: Oct: Avge. price £265,738. Monthly change +0.1%. Annual change +2.4%
Halifax: Oct: Avge. price £294,867. Monthly change +0.5%. Annual change +5.2%
Land Registry: Aug: Avge. price £291,000. Monthly change +0.2%. Annual change +2.9%
Zoopla: Sept: Avge. price £268,900. Annual change +1.1%
Rightmove: Oct: Avge. price £371,958. Monthly change +0.3%. Annual change +1.2% (asking prices on Rightmove)

BUY-TO-LET

The rental market has, once again, reached new highs but shows signs of stabilising. While the average rent outside London hit a 19th consecutive quarterly record of £1,344 pcm, the 5.2% annual growth rate is at its slowest since 2021.

In London, rents have also reached new heights at £2,694 per month – up 2.5% from last year. Tenant demand, though, has moderated with the average number of enquiries per property falling from 23 last year to 15.

And with supplies of rental property rising, for the first time in a while, landlords are having to adjust their expectations downwards. Over a fifth of rental properties are currently seeing price reductions to secure a tenant, which is up from 16% last year.

In other news, The Autumn Budget’s increase in the stamp duty premium for BTL properties to 5% was not good news for investment in the sector but there was relief that the expected rise in Capital Gains Tax didn’t happen.