Autumn usually brings a monthly house price increase, but October 2024 has seen more restrained growth. Rightmove reported that the average new seller's asking price rose by 0.3% (+£1,199). However, despite the smaller rise, buyer activity surged, with 29% more sales agreed compared to last year's sluggish market.
This increase in buyer interest is further reflected in the 17% rise in people contacting estate agents about purchasing homes. Moreover, there has been a 12% rise in the stock available per estate agent compared to a year ago, the largest growth in a decade. With two potential bank rate cuts on the horizon and wages expected to outpace house price inflation, 2025 looks good to be an active period for the housing market.
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House price growth highest in two years
While October's price growth may seem modest, it follows a pattern of sustained growth over the past two years. Average house prices have increased by 3.2%, supported by higher wages and the lower cost of borrowing. Buyers and sellers alike are returning to the market after a period of uncertainty, spurred on by better economic conditions.
Mortgage approval levels have been strengthening for much of this year, and experts are now seeing this increase in buyer demand start to filter through to actual sales, with monthly transactions being the strongest since 2022. This improving market momentum has also helped tempt many sellers back into the market who had previously put their plans to move on pause.
Property investors face higher Stamp Duty
With tax rises and spending cuts anticipated in Labour's first Budget, the property market was expecting higher CGT and SDLT rates. However, Chancellor, Rachel Reeves CGT for residential assets unchanged from its current rates of 18% and 24%, which are already higher than any other asset class.
In a budget aimed at boosting the morale of the working class, first-home buyers remain shielded from higher stamp duty but those buying additional homes like buy-to-lets and holiday homes face a 2% surcharge from 3% to 5%, with effect from 31st October 2024.
Optimism amongst homebuyers for 2025
The recent base rate reduction in August reignited interest in the property market. In a recent in-house survey of over 1,200 homebuyers, 61% of respondents said they plan to buy in 2025, despite 59% being put off by last year's peak in interest rates at 5.25%.
More information:
Benham & Reeves
www.benhams.com