The UK property market, as indicated by a recent Savills report, continues to experience a gradual and consistent decline in housing prices. While September saw no change in prices compared to August, the annual decline stands at -5.3%.
Market Activity and Rental Growth
Market activity remains stable but falls below the "pre-pandemic average." In August, 95,000 property sales were recorded, marking a 14% drop from the figures reported in 2017-2019. On the other hand, annual rent growth in the UK remains high, with a notable increase of +10.3% in August, leading to improved profitability for landlords.
In the coming months, analysts predict further downward adjustments in prices, primarily due to the fact that demand is decreasing at a faster rate than supply. However, medium-term prospects have improved, as there is a growing sense of economic stability. Nevertheless, the Bank of England has opted to maintain the base interest rate at 5.25%.
Mortgage Rate Reduction
In response to the central bank's decision, lenders have further reduced mortgage rates, which is likely to benefit prospective homebuyers.
The current conditions in the UK property market present an opportune time for potential buyers. Sellers are increasingly willing to offer discounts, and market analysts are emphasizing the relative stability of the sector. While short-term price adjustments are expected, the medium-term outlook suggests a balanced economic landscape, making it a favorable period for property investment.