Want to buy property in the UK Rent prices skyrocketed in 2022 and 2023 as demand and supply imbalances increased competition for rental properties., UK mortgage rates reached a 15-year high earlier this year due to rising interest rates and the UK government’s shock policy measures at the end of 2022. The average interest rate on a two-year fixed-rate mortgage jumped to 6.86% in July, from about 6% at press time, according to data provider Moneyfacts.

At first glance, neither renting nor buying property in the UK looks particularly attractive at the moment. But Tom Bill, head of UK housing research at estate agency Knight Frank, says the coming months could be a good time to enter the market.

“If you look at what the Bank of England is doing, now is probably the best time,” he told CNBC’s Sylvia Amaro.

Want to buy property in the UK This is because the Bank of England is likely to end the rate hikes that determine mortgage rates for millions of UK homeowners. And while speculation has now turned to when rates will be cut, Bill said mortgage rates are unlikely to fall significantly: “We’re talking about a small downward move.” The world is raising interest rates to cool the economy. Recent data, including inflation statistics, suggest that rising interest rates are having the desired effect of lowering prices, raising expectations that the central bank could start cutting rates in 2024. .

Mortgage lenders also aim to gain and maintain market share Bill says it has been a “thin” year for the industry, leading to downward pressure on mortgages.

buy property in the UK
Residential living in North London, UK

Want to buy property in the UK Richard Donnell, executive director of research at property data firm Zoopla, said higher mortgage rates typically lead to lower house prices, a trend mirrored in the UK, but prices remain below pre-pandemic levels. It is said that it exceeds the level of

“Prices have fallen by just under 5%, but house prices are still £40,000 higher than they were before the pandemic started in early 2020,” he told CNBC.

However, Donnell noted that transactions this year are down 23%, and while this is not good news for the property market, it could be good news for some buyers. did.

“The average sale price agreed is £18,000 below the asking price, the highest discount in five years.” “This means it is a good time to enter the market to tighten price negotiations.”

The Coming six months

Want to buy property in the UK Knight Frank’s bill suggests the next six months could be a good time to get on the property ladder.

“I’ve felt a lot better in the last few weeks. So when you try to time your purchases, and a lot of times people try to buy at the right time, the next six months are going to be the same as the last six or so.” “It’s going to feel like it’s going to be better than the moon,” he said.

As Mr. Donnell emphasizes, prices may fall further. “Despite mortgage rates continuing to fall, house prices are expected to fall by a further 2% in 2024 as prices adjust to lower purchasing power,” he said.

However, there are potential headwinds in the sales market. The UK general election is scheduled for next autumn. Bill points out that property markets often slow down in the run-up to elections, particularly where a change of leadership is expected, which is currently the case in the UK.

Rental outlook

Meanwhile, the rental market is expected to remain tight and rents will continue to rise. A strong labor market, high immigration and high mortgage rates that “catch potential buyers” are all factors, Donnell said.

“The imbalance between supply and demand will continue until 2024, but demand will weaken as affordability pressures increase,” he said. Still, rents are expected to rise 4 to 5 percent next year, he said.

Bill noted that although supply has started to increase in some parts of the country, demand still far exceeds demand. “It’s getting back to normal, but it’s not completely normal yet.”