House prices across the UK are rising for the first time in two years, as expectations for further interest rate cuts from the Bank of England to lower mortgage costs have boosted the property market.
According to the Royal Institute of Chartered Surveyors (RICS), demand, sales and the number of new listings all increased in September. The remaining 16% of experts reported that prices rose in September, up from a flat 0% in August and the first positive result since October 2022.
14% of professional net balances reported an increase in buyer demand and 5% reported an increase in sales. Looking ahead, 23% expect further sales growth in the next three months, and 45% expect sales growth next year.
Additionally, 22% of professionals report an increase in the number of new real estate listings. Part of this increase is due to speculation over a possible increase in capital gains taxes, which is causing some homeowners to list their properties sooner than they otherwise would.
The report added that there was a more positive attitude in the market, likely linked to the Bank of England’s recent interest rate cuts and growing expectations of further rate cuts in the coming months.
Read more: UK house prices rise for third consecutive month as mortgage rates fall
Tarrant Parsons, head of market analysis at RICS, said: “The recent easing in mortgage rates continues to support a recovery in buyer demand, and our latest findings reiterate the positive outlook for housing market activity. โ he said.
โCrucially for the outlook, further easing of monetary policy is expected over the coming months, which should provide a more favorable backdrop for markets going forward.
โIn line with this idea, forward-looking sentiment data from our survey points to increased sales volumes both in the short term and over the next 12 months.โ
The rental market remains tight, with demand consistently outstripping supply. RICS said that although tenant demand is increasing, rental property vacancies are decreasing. This trend is also influenced by homeowners looking to sell ahead of potential changes to capital gains tax.
RICS Managing Director Tina Payet said: “The findings highlight the pressure on renters, with demand consistently outstripping supply.” While the Landlord Bill of Rights aims to improve standards and protect tenants, it is important to ensure that these reforms do not prevent responsible landlords from participating in the market. โ
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Meanwhile, property website Zoopla reported that the average price of a house in the UK is now around ยฃ300 per square foot. The data reveals significant regional disparities, with costs in Hartlepool being the lowest at ยฃ118 per square foot and highest in Kensington and Chelsea at ยฃ1,373.
Izabella Lubowiecka, senior real estate researcher at Zoopla, advised prospective buyers to carefully consider the square footage of their property. “Adding a bedroom or bathroom may not provide the space a buyer really wants. Assessing square footage helps buyers determine whether the cost per square foot is justified. It will help you decide.โ
The type of property certainly affects the cost per square foot of a home, but this also varies by region. With the average price per square foot in London being ยฃ585, buyers looking for a home in the capital are highly unlikely to find one priced below the national average.
It is estimated that a third of areas in the south of England offer homes with an average price of less than ยฃ300 per square foot.
The region’s historic seaside resorts and port towns offer some of the most affordable housing on a pound per square foot basis, up to 45% below the regional average. Zoopla says the most cost-effective areas to consider are Portsmouth (ยฃ230), Plymouth (ยฃ180), Dover (ยฃ230), Great Yarmouth (ยฃ180) and Queenborough (ยฃ230). said.
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