Home buyer inquiries also rose by 26% annually over the same period
Lower mortgage rates are triggering an uptick in the U.K. housing market, following a surge in the pace of home sales last month, according to data.
Agreed home sales increased by 25% year-on-year in the four weeks to September 22, marking the fastest pace of growth since spring 2021, “as households that have held off making moving decisions over the past 2 years return to the market,” as per research published Thursday by property portal Zoopla.
Home buyer inquiries also rose by 26% annually over the same period, according to the data.
Shares of U.K. homebuilders Taylor Wimpey and Barratt Developments both rose more than 2.1% following the data release.
It comes as house prices rose at their fastest pace in nearly two years in September, as per Nationwide, increasing 3.2% year-on-year from 2.4% in August, when lenders began cutting borrowing costs in response to the BoE’s first interest rate cut in more than four years.
Mortgages rates have now dropped to an average of 4.57% for a five-year fixed term, down from 5.53% last year, as per the latest data compiled by property portal Rightmove. Some rates for such products have dropped to 3.7%, well below the Bank of England’s 5% key rate.
Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the last two years, Richard Donnell, executive director at Zoopla, said in the report.
Mortgage approvals rose in August to the highest level in two years, the BoE said Monday.
Market watchers are now awaiting the Bank of England’s November 7 meeting for further movement on borrowing costs, with Governor Andrew Bailey telling the Guardian Thursday that the Bank could be a “bit more aggressive” on rate cuts if inflation data continued to be good.