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Bank Rate Cut Has Potential to Boost Property Market Recovery

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    Current Property Market Showing Stable Growth

    Home’s recently published Asking Price Index reveals a snapshot of the current UK property market.

    Home’s data shows that asking prices increased by 0.2% in August 2024 across England and Wales compared to the previous month. This is the seventh consecutive monthly rise, suggesting a return to stable growth. It’s also a 1.2% improvement on the August 2023 figure.

    The report also includes a forecast for the near-term outlook now that the Bank of England has finally cut the Base Rate for the first time since 2020. Home predicts that monthly growth could surpass the all-time high of August 2022 in the next few months.

    This is promising news for those on the lookout for buy-to-let property investment opportunities, learn more about this with our property investment guide.

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      Regional Variations are Still Apparent

      According to Home, the northern markets are currently outperforming the southern regions, and the rate cut may put these markets into overdrive in the near term.

      The East of England and Greater London are expected to keep recovering slowly despite the rate cut due to their comparatively low rental yields.

      However, northern markets have already recovered to above 2022 levels and continue to grow at inflation-beating rates. Home states that the prospects are even more promising thanks to the rate cut.

      The unsold sales stock count for England and Wales saw another uptick over the last month, reaching a 10-year high for August. Close to 6,000 properties were added to agents’ portfolios, bringing the total unsold stock to 494,837.

      Market momentum is in relatively good shape, as suggested by the median typical time on the market for unsold property, four days less than in August 2019.

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      Supply-Demand Imbalance in Stock Pushes Up Rental Costs

      Home’s report states that new energy-efficient rental stock is needed to help ease the supply-demand imbalance in the private rental market.

      This shortfall in available properties is continuing. While there were 96,000 properties available to rent in 2019, there were 66,000 in August 2024, representing a decline of 31%.

      Rises in asking rents persist despite a slowdown in growth. Overall, UK asking rents are 1.1% higher than in August 2023. Like the sales market, the rental market is also showing regional variations. Year-on-year falls have been observed in Greater London, the East Midlands, and the West Midlands. However, many northern regions are indicating double-digit annual growth.

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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        Market & Investment Trends, UK