By David Milliken
LONDON (Reuters) – More Britons made enquiries with estate agents about potential house purchases over the past four weeks as mortgage rates started to fall, breaking a downward trend which has been in place since April, property website Zoopla said on Thursday.
Zoopla said the volume of viewing enquiries made for specific properties advertised by estate agents on its website had risen by 12% over the past four weeks, although it was still a third lower than a year earlier.
“Better news on inflation and the end of base rate increases has provided scope for lenders to start reducing mortgage rates which has supported a modest uptick in demand for homes,” Zoopla’s executive director, Richard Donnell, said.
Seasonal effects also aided the rise, Zoopla said.
Weekly mortgage data collated by property website Rightmove showed the average interest rate for a mortgage with a two-year fixed rate fell from an average of 6.41% in August to 6.07% this week.
This still represents a sharp increase from 4.60% a year ago, when mortgage rates had already begun to climb after bond markets baulked at the then-Prime Minister Liz Truss’ budget plans as well as BoE tightening.
Last week the BoE surprised many investors when it kept its interest rate on hold at 5.25%, following official data which showed an unexpected fall in consumer price inflation in August.
Other housing market measures have shown a continued squeeze on property sales and prices.
The Royal Institution of Chartered Surveyors said its gauge of new buyer inquiries fell in August to its lowest since October 2022, when there was intense bond market turmoil after Truss’s budget plans.
Mortgage lender Halifax said house prices in August were 4.6% lower than a year earlier, the sharpest drop in 14 years.
(Reporting by David Milliken, editing by William James)