UK House Prices Set to Edge Higher in Q3 Based on Deals Already Agreed

According to new findings, house prices in England and Wales are projected to rise by an average of 1.6% in the next quarter, based on existing agreements. Despite the challenges of increasing interest rates and financial strains on households, data analysis from over 174,000 conveyancing quotes indicates that property prices in Q3 will surpass those in Q2.

The research conducted by Reallymoving reveals the prices that buyers have recently committed to paying for properties when utilizing the comparison site for conveyancing services. This platform is utilized by nearly 10% of all home movers in the UK, providing unique insights into the anticipated final sale prices three months down the line.

The data suggests that a significant number of motivated buyers remain in the market, willing to bear higher borrowing costs to secure their desired properties. While the government's pressure on lenders to be accommodating towards borrowers has resulted in few forced sales, a substantial portion of sellers possess discretionary power. If they fail to achieve their desired price, they would rather withdraw their properties from the market than settle for significantly lower offers. Consequently, buyers who are compelled to move are forced to stretch their budgets.

Rob Houghton, the CEO of Reallymoving, stated, "House prices have yet to fully recover from the impact of the recent economic adjustments. However, despite the rise in mortgage rates, buyers and sellers have continued to finalize deals at elevated prices. Over the past three months, we have observed an increase in downsizer activity, accounting for 29% of all home moves. Many of these downsizers will be relatively unaffected by the higher borrowing costs."

Houghton added, "If we witness a surge in forced sales or highly motivated sellers as a result of growing numbers of households reaching the end of their fixed rate agreements, we may experience price declines later this year. However, currently, we are not observing significant indications that sellers are being forced to accept lower offers."

Houghton advised, "Any buyer currently searching for a house should ensure they possess a mortgage offer in principle and factor in the possibility that, at least in the short term, the value of the property they purchase may decrease. Ideally, home movers, particularly those with small deposits, should plan to reside in their properties for a minimum of five years to weather any market fluctuations."