The UK property market has faced a whirlwind of change which has impacted buying power and accessibility in recent years. From political turbulence to the pandemic, and more recently, record high interest rates and inflation, buyers and sellers alike have had to navigate an uncertain property market. Despite these challenges, a positive outlook for homebuyers […] The post Hope for Homebuyers: UK’s Property Market Surge appeared first on SevenCapital.
The UK property market has faced a whirlwind of change which has impacted buying power and accessibility in recent years. From political turbulence to the pandemic, and more recently, record high interest rates and inflation, buyers and sellers alike have had to navigate an uncertain property market.
Despite these challenges, a positive outlook for homebuyers is emerging, driven by factors that point toward growing opportunities for those looking to step onto or move up the property ladder.
Here, we take a look at the current homebuyer landscape, how the UK property market has become more accessible in recent months and what we can expect for the year ahead.
Competitive Interest Rates
The Bank of England’s decision to reduce the base rate by 0.25% back in August was a huge sigh of relief for homeowners and homebuyers alike and signalled a significant shift in the property market.
Mortgage lenders began to offer more competitive rates to homebuyers which, in turn, gave a huge boost to market activity. In fact, Zoopla’s October House Price Index highlights that mortgage rates are now at their lowest levels in the last 15 months, driving a 26% increase in homebuyer demand and a 25% increase in number of sales agreed.
This positive momentum remained as prospective homebuyers who had previously held off began to re-enter the market despite the most recent decision to hold base rates at 5%. This emphasises improved confidence in the UK property market overall.
There are high hopes that the Bank of England will reduce base rates again when they meet on the 7th of November, further reducing the overall cost of borrowing which has proved a huge barrier for homebuyers.
Relaxed Affordability Criteria
Off the back of lower mortgage rates from lenders, many are now reviewing and easing their affordability criteria to remain competitive. By easing requirements around income thresholds and deposit sizes, a wider pool of buyers—especially first-time buyers or those with fluctuating incomes – are now able to gain access to the housing market, further stimulating its growth.
Nationwide, the UK’s second largest mortgage lender, has announced that it will allow aspiring homebuyers to borrow up to six times their income as part of their own Helping Hand scheme. This means, for example, that a couple with a joint income of £50,000 are now able to borrow up to £300,000 – an increase of £75,000.
As offers like this come onto the table, its likely that other lenders will begin to offer similar incentives.
Help for Homebuyers
There are plenty of schemes to help make homeownership more attainable for prospective buyers by targeting the key obstacles they face: deposits and mortgage rates.
Lifetime ISAs have been around for years and are an incredibly useful tool for buyers saving for their deposit – offering a 25% government bonus each tax year up to the value of £1000.
Additionally, schemes such as the Mortgage Guarantee Scheme means homebuyers can step onto the ladder with just a 5% deposit, opening the door to a wider pool of people and accelerating demand.
The Own New Scheme’s Rate Reducer offer enables buyers to access more favourable mortgage rates when buying new build properties across the UK – something that has been widely welcomed in the market given the high interest rates on the market throughout 2023. Both first-time buyers and home movers are eligible to take advantage of this scheme depending on their loan-to-value and many property developers, like SevenCapital, have signed up to be a part of it.
The Grand Exchange apartments in Bracknell are now available via the Own New Rate Reducer Scheme. Find out more and register your interest here.
Increased Housing Stock: More Choices for Buyers
Over the last couple of years, a difficult property market has seen house prices fluctuate considerably and sellers reluctant to put their properties on the market.
However, as steady property price growth continues, the number of properties coming onto the market has followed suit and the disparity between demand and supply has eased significantly. In fact, Zoopla data revealed that almost a third of homes for sale are chain free – an extremely attractive quality for the homebuyer market.
For prospective buyers, this means a wider variety of homes to choose from, attracting many back to the market as they find properties better matched to their requirements.
Additionally, this increased availability of properties has helped to stabilise the market, making property price growth more sustainable and reducing the likelihood of sharp rises that previously pushed homeownership out of reach for many.
What’s next for Homebuyers?
With new government policies taking effect and a more positive economic landscape taking shape, there is high optimism for even lower base rates before the end of the year.
Zoopla’s most recent House Price Index predicts that mortgage rates will settle between 3% and 4% throughout 2025, further stimulating the property market and enticing more buyers to return.
Overall, 2025 is likely to be a year of increasing homebuyer confidence but cautious optimism for the UK property market, with more stability and gradual price adjustments creating better opportunities for homebuyers.
The post Hope for Homebuyers: UK’s Property Market Surge appeared first on SevenCapital.
