According to a recent survey by Bloomberg Intelligence, a whopping 40% of UK house hunters are now eager to push forward with their homebuying plans, spurred on by the fear of missing out as house prices look set to rise rather than fall. This marks a significant increase in urgency compared to previous years, highlighting a rejuvenated interest in securing a place to call home.
The shift in sentiment can be largely attributed to the easing of mortgage rates, which had soared to alarming highs in 2023. Bloomberg Intelligence’s senior real estate analyst, Iwona Hovenko, points out that the relaxation of these rates is breathing new life into the UK housing sector. The figures are telling: 41.5% of prospective buyers are hastening their purchasing plans, a significant leap from 35% in mid-2023 and 31.2% in October 2022.
A Decrease in Delays
Moreover, the survey reveals a downturn in the number of individuals putting their homebuying dreams on hold or significantly postponing their moves. Only 8.5% of respondents admitted to pausing their plans in February, a drop from around 13% during the summer of last year and the final quarter of 2022.
The Expectation of Rising Prices
One of the key drivers behind this acceleration in homebuying plans appears to be the widespread belief among buyers that property values are on the upswing. This conviction is likely to lend further momentum to the growth of UK house prices, with many survey participants citing the anticipation of increasing prices as their main motivator.
Even those who are delaying their purchasing decisions seem less inclined to wait for a drop in property values, signaling a shift in the overall market sentiment.
The Fear of Missing Out
This emerging trend suggests a potential self-fulfilling prophecy in the making, with house hunters’ fears of escalating prices and the risk of being priced out prompting them to act sooner rather than later. Yet, despite this newfound optimism, high mortgage rates stand as a formidable barrier for some, dampening their homebuying aspirations. The challenges of poor mortgage affordability and lofty valuations, albeit slightly diminished from their peak, might still put a damper on any significant growth in house prices.
A Call for Legislative Support
In response to these dynamics, there have been calls for legislation to support longer-term mortgage-rate fixes to stabilise the market and shield homeowners from the whims of interest rate fluctuations. However, the reception to such proposals appears mixed at best. According to Hovenko, a mere 7.6% of survey respondents showed a preference for 10-year fixed-rate mortgages, a decline from earlier figures, hinting at the high costs and limited flexibility as potential deterrents, especially in light of possible rate cuts on the horizon.