Declining mortgage rates and the stability provided by a new government have given a notable boost to the housing market this autumn. The improved conditions have sparked a rebound in buyer demand and encouraged more sellers to put their properties on the market. This renewed activity is helping to counterbalance the market’s previous slower pace.

In September, asking prices for UK homes rose at a pace twice the long-term average. This significant increase reflects the positive impact of lower mortgage rates and the certainty brought about by the new government. The average asking price for homes climbed to £370,759 in the four weeks leading up to mid-September.

This 1% rise from the previous month indicates a strong recovery in the housing market. According to data released by the property portal Rightmove on Monday, the uptick in asking prices highlights the growing buyer interest and increased market activity, demonstrating a shift towards a more dynamic housing market.

In September, property prices usually experience a modest increase following the summer period. This year, however, the rise was notably significant. After a 1.5% decline in August, September saw a price increase that was double the long-term average of 0.4%, according to data from the property portal.

Tim Bannister, Director of Property Science at Rightmove, commented on the current market trend. He highlighted that autumn has begun with a noticeable surge in activity from both buyers and sellers. This early rebound in market activity follows a period of subdued conditions during the same time last year. Bannister attributed this positive shift to the continued momentum from a stronger-than-expected summer market.

The current market dynamics reflect a shift in buyer and seller behaviour, influenced by recent economic changes and market conditions. The increase in asking prices is indicative of the growing confidence among market participants and a response to the changing economic environment.

He noted that the stability brought by the new government, combined with the Bank of England’s first rate cut in four years, has revitalised the market and created a new opportunity for buyers and sellers.

Markets are anticipating that the Bank of England will maintain current interest rates when policymakers meet on September 19, with another rate cut expected in November. Further reductions are predicted for 2025, following a decrease in inflation to 2.2% in July from a peak of 11.1% in October 2022.

The recent price growth was largely driven by larger properties, with the cost of four-bedroom detached houses and other larger homes rising by 0.8%.

The average asking price for three-bedroom and non-detached four-bedroom properties increased by 0.7% over the month, while prices for smaller properties grew by only 0.2%.

In August, the Bank of England lowered interest rates by 0.25 percentage points to 5%, the first rate cut since the pandemic began. 

In September, asking prices rose by 1.2% compared to the previous year, marking the highest annual increase in over a year. 

The rise in real wages is also driving housing demand, with a 27% increase in sales agreed upon in September compared to the same period last year. 

The Rightmove house price index, which gathers data from over 13,000 estate agency branches, also indicates a rise in the number of properties available.

Rightmove has observed a notable increase in homeowner confidence, with the number of new sellers rising by 14% compared to September of the previous year. This uptick has led to the highest average number of homes available per estate agent since 2014, indicating a stronger supply of properties on the market.

Tim Bannister, Director of Property Science at Rightmove, anticipates that this positive market momentum will likely continue. However, he has raised concerns about how future developments, particularly the upcoming Budget announcements, might impact the housing sector. These potential changes could influence market conditions and buyer behaviour.

Nathan Emerson, Chief Executive of Propertymark, also expressed apprehension about the market’s direction. He suggested that the current surge in activity might be a reaction to anticipated changes in the Budget. According to Emerson, the increased figures could indicate a pre-Budget rush from sellers looking to capitalise on the current market conditions before any new policies are introduced.

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