Navigating the Harborne and Edgbaston property market with confidence

In our previous blog, we highlighted the increase in UK property market activity during October. Now, we're turning our focus to the latest data on property prices and key trends shaping the market.

The UK property sector continues to display resilience, driven by stabilised mortgage rates and a renewed interest in homeownership despite broader economic uncertainties. In this article, we’ll delve into recent statistics and trends, offering insights to help both buyers and sellers make informed decisions in today’s evolving market landscape.

Current UK Property Prices: A Steady Rise
As of August, Land Registry data reports the average UK property price at £293,000—a 1.5% rise from July and a 2.8% increase compared to the same period last year. This represents the fifth consecutive month of growth, indicating that the upward trend began prior to recent market improvements. This steady climb in prices is driven by robust demand, supported by favorable mortgage rates and growing buyer confidence.

October's market data reflects this strong demand, with average asking prices for properties under offer increasing by 1.74% from September and 4.31% compared to October last year. This upward shift suggests that buyer demand is not only strong but also continues to be buoyed by mortgage rates, which have hovered to around 4% for popular fixed-rate options.

Mortgage Rates and Buyer Demand
A recent dip in mortgage rates has added momentum to buyer activity, making homeownership more accessible and increasing competition among buyers. Currently, the average rate for a five-year fixed mortgage hovers around 4.7%, with some options available as low as 3.84%. While this decline is modest, it has given a boost to purchasing power and encouraged more buyers to enter the market.

Predictions for the coming year suggest that rates are likely to remain stable through 2025. As a result, sellers should consider setting competitive prices to attract value-conscious buyers who are keen to maximize their purchasing power while interest rates are favorable.

The Importance of Pricing Realism
Despite the active market, realistic pricing remains essential for sellers. October’s Rightmove House Price Index shows only a 0.3% increase in asking prices for new listings, well below the seasonal average of 1.3%. This smaller-than-average increase indicates that sellers who set high initial asking prices may face more price reductions to attract interest.

Indeed, October saw a 22% increase in price reductions compared to the six-year average, underscoring the need for sellers to set achievable prices from the outset. With a large selection of properties on the market, buyers are well-informed and will likely be drawn to listings that offer good value and reflect current market conditions.

Political and Economic Influences on Market Sentiment
Political events and economic forecasts continue to shape market sentiment. Historically, the property market often responds positively following significant political developments, such as budget announcements or elections. For instance, after the summer election, the market saw an uptick in activity, with an increase in new listings and a boost in property prices.

Despite recent economic challenges, buyer interest remains strong. Rightmove reports a 29% increase in sales agreed compared to last year, alongside a 17% increase in buyer inquiries to estate agents. Additionally, there has been a 12% increase in property listings, reaching a 10-year high. These numbers highlight the enduring interest in homeownership among prospective buyers, even as they navigate an uncertain economic landscape.

Economic Forecasts and Future Market Expectations
Looking to the future, projections from the Office for Budget Responsibility (OBR) indicate a slight slowdown in house price growth, from 1.7% in 2024 to 1.1% in 2025. However, house price growth is expected to average 2.5% from 2026 onwards, supported by nominal earnings growth. By 2028, the average UK house price is forecasted to reach £310,000, an increase of £17,076 from current levels.

Interest rates are expected to stay relatively high in the short term but may moderate by autumn 2025, potentially dropping to around 3.5% if economic conditions allow. For both buyers and sellers, it’s worth remembering the adage that “time in the market beats timing the market.” The UK property market’s resilience suggests that those ready to enter the market in the near term could benefit, as long as they are prepared for gradual growth and moderate interest rates.

Taking the Next Step
The UK property market continues to demonstrate strength, driven by steady demand, attractive mortgage options, and a gradual increase in prices. For those considering buying or selling, understanding current trends and aligning with competitive pricing strategies is key to navigating this dynamic environment. Whether you're planning to purchase or sell, making informed decisions will be crucial for success in today’s market.

Interested in knowing the current sale value of your property? Maybe thinking ahead to 2025 and a potential move? We offer a FREE no-obligation market appraisal to help you assess your options. Get in touch with us at movinghome@mchugohomes.co.uk or visit mchugohomes.co.uk/value-my-property for more information. Let us guide you through the property market with confidence.