The interest-rate cut by the Bank of England has sparked a dramatic new surge in inquiries from house buyers – prompting Rightmove to revise its house price forecast for 2024.

The number of potential buyers contacting agents has jumped by eight percentage points, from 11% in July to 19% at the start of August, compared with the previous year.

Meanwhile the number of sales being agreed is up 16% year on year, while the number of new sellers putting their homes on the market is up 5% on the same period in 2023.

Agents have reported that increased political certainty and the improving economic outlook is helping to boost interest, according to the property portal.

Rightmove says the boost in activity following the bank rate cut from 5.25% to 5% – the first change in 12 months – has led it to change its 2024 house price forecast from a 1% fall over the year to a 1% rise in asking prices.

Welcome boost to buyer activity

“The first bank rate cut since 2020 has sparked a welcome late summer boost in buyer activity,” said Tim Bannister Rightmove’s Director of Property Science.

“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment.”

He believes the conditions are ripe for a more active autumn market when the summer holiday season draws to a close.

“The reaction from home-movers to what is hopefully only the first of several rate cuts over the next year or two, combined with other positive data and trends, has led us to raise our price prediction for the year,” he added.

Note of caution

Mortgage rates are continuing to head downwards, with increasing competition between lenders. Rightmove’s weekly mortgage tracker shows the best available five-year fixed rate is now 3.83% for those with a 40% deposit, the lowest since before the mini-Budget in September 2022.

However, Mr Bannister sounded a note of caution to agents and vendors. “Though optimism around the direction of mortgage rates is justified, the reality is that they are still very high compared with a few years ago, and there will be some who need rates to drop further before their affordability is notably improved.

“Buyers are still stretched, and so sellers mustn’t get too carried away by the higher buyer activity levels compared with last year, and continue to come to market with a competitive price.”

‘Crucial to set realistic prices’

Gary Hamilton, founder of Bohome Estate Agents in Hamilton, agreed with this sentiment. “July was a strong month for us, reflecting the resilience of our market. We’ve seen a mix of outcomes, with some properties achieving well above the expected price whereas others sold closer to it,” he said.

“This underscores how crucial it is for sellers to set realistic and competitive prices in today’s market, as getting the price right is key to attracting strong buyer interest. With schools returning and routines normalising, we expect activity to pick up further in the coming weeks. The stability we’ve observed in July positions us well for continued growth into the autumn.”

Josephine Ashby, Managing Partner at John Bray Estate Agents in Cornwall, commented: “There is no doubt that activity slowed in the build-up to the general election despite a result that was no great surprise to the country. With the election now behind us we are seeing an improvement in buyer engagement as more certainty in the political and economic landscapes forms.”