85% of agents surveyed believe that higher mortgage rates are keeping market activity down
The latest market insight by estate agent comparison site, GetAgent.co.uk, has found that the majority of estate agents expect a summer interest rate cut to help revitalise buyer market activity, however, they remain split as to whether this will help drive up house prices.
The survey of over 600 agents, commissioned by GetAgent, found that while 31% have seen an increase in buyer enquiries so far this year versus last year, 34% have observed the same level of market activity, while 35% have seen a reduction.
85% of those surveyed believe that higher mortgage rates have dampened buyer market activity, with 79% stating that the issue has persisted due to the Bank of England’s decision to keep rates held at 5.25%.
The latest Gov figures show that inflation has fallen to its lowest level in almost three years and, at 2.3%, sits close to the Bank of England’s target rate of 2%.
However, while a rate cut was widely expected this summer, April’s inflation figure came in higher than expected, denting hopes that we could see a cut in June.
But the majority of agents surveyed by GetAgent believe a cut is what’s needed to boost buyer interest, with 83% believing that when rates do come down, more buyers will be enticed back to the market.
82% also stated that a rate cut would help spur more buyers into making offers on properties.
But when it comes to the price they are willing to pay, agents remain split. 52% believe that more buyers will offer a higher percentage of the asking price compared to the current market if rates do come down, with 48% believing that they will continue to offer the same.
Co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “Transactions so far this year have been at their lowest levels since 2013. The number of listings has remained quite high but properties have not been selling at the rate they have over recent years.
"This has been a double serving of trouble for agents as they have had to pay to acquire the same number of listings, pay for photos, and pay to market the properties but are not generating the same revenue.
"It’s great to finally see light at the end of the tunnel. May’s transaction numbers increased year on year and, with inflation falling, cheaper lending appears to be on the horizon. It can’t come fast enough for the property industry!”