Buyer interest is showing signs of recovery despite house prices remaining flat and mortgage costs continuing to put pressure on affordability.
Latest Lloyds figures show UK house prices were unchanged in September both on the month and year, leaving the average property value at £298,441.
However, new mortgage enquiries increased at their fastest rate since February, suggesting potential buyers are beginning to return to the market.
The improvement in activity comes as mortgage rates have been edging higher, creating a mixed picture for agents heading further into the autumn market.
BUYER AFFORDABILITY
Separate Lloyds analysis shows homes have become more affordable relative to earnings, with the average house price-to-income ratio falling from 7.6 to 7.3 – its lowest level in 11 years.
But average monthly mortgage repayments have increased from £1,100 to £1,157 over the past year as borrowing costs have risen.
Elliot Castle (mai picture), Chief Executive Officer of We Buy Any Home, says: “Flat house prices can look like good news for buyers, but the price of the property is only one part of the calculation.
“The bigger question is what that property will actually cost you every month once you factor in the mortgage rate, bills, maintenance and all the other costs that come with owning a home.”
AUTUMN ACTIVITY
Castle warns buyers against interpreting an increase in enquiries as evidence that prices are about to rise sharply.
He says: “Buyers shouldn’t feel pressured into making a decision simply because they are seeing more activity in the market.
“More people making enquiries does not mean prices are about to surge, and it certainly doesn’t mean you should take on a mortgage that leaves you financially stretched.”
Castle adds that flat prices could give buyers greater scope to negotiate, but says purchasers should assess the overall cost of homeownership rather than focusing solely on the purchase price.
