Property sales are rising at the fastest rate since the lockdowns following cuts in home loan .
The number of sales agreed in the four weeks to September 21 rose by an annual rate of 25 percent. That is the sharpest increase since the spring of 2021, according to the property portal Zoopla – and comes as Brits await a major Bank of England decision on that could spark further sales.
At the same time, new buyer inquiries to estate agents rose by an annual rate of 26 percent over the same period, which represents the biggest increase in more than three years marking the fastest pace in more than three years, according to data released on Thursday.
Richard Donnell, executive director at Zoopla, said: “Lower rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the past two years.”
The news came as the governor the Bank of England signalled further cuts could come in weeks with many City experts suggesting there could be two 0.25 percentage point cuts in the base rate before Christmas, bringing it down to 4.5 percent.
mortgage approvals rose to the highest level in two years in August (Image: Getty)
Recent data from the Bank of England showed that approvals rose to the highest level in two years in August, while the lender Nationwide reported its home loan approvals are rising at the fastest pace in two years.
Nationwide recently announced a relaxing of its lending rules to allow first-time borrowers to borrow up to six-time salaries up to an eye-watering maximum of £750,000.
The average two-year fixed rate deal — with a 60 per cent loan-to-value — was 4.7 percent in August, down from 4.9 percent the previous month. The figure was well below the recent peak of 6.4 percent reached in August last year.
Alex Kerr, an economist at the consultancy Capital Economics, said further declines in swap rates, which are the charged by finance giants to lend to one another, suggests there is “scope for rates to fall further and for house price growth to accelerate next year”.
Zoopla reported there has been a 16 percent annual increase in new properties coming to the market, and a 12 percent rise in the stock of homes for sale.
Its experts said a number of second homeowners, including landlords, have been putting properties up for sale for fear of being hit by increases in capital gains taxes on property profits in the October budget.
Supply growth was particularly strong in coastal and rural areas, where possible tax changes in the Budget are coupled with many English councils planning to double council tax for second homes for the next year, according to Zoopla.
In areas such as Truro, Exeter, and Lincoln the supply of homes increased by an annual rate of more than 20 percent last month.
Nigel Bishop, managing director of the buying agent Recoco Property Search, told the FT that second homeowners and buy-to-let investors are facing “drastic changes” over tax reforms on empty homes.
He said: “If a substantial number of second homes is being put up for sale, we could see the property market in areas such as Cornwall become increasingly attractive to house-hunters who are seeking a permanent residence but are currently priced out of the market.”