Falling Mortgage Rates Spark Increase in Instructions for House Purchases

The current trend of falling mortgage rates has seen an increase in instructions across legal Real Estate. The latest data from Legal & General has revealed that improved affordability on mortgages with lower interest rates included has seen a rise in house purchases, especially in first-time buyers with searches by brokers on behalf of first-time buyers growing by nearly 10% in September this year.

This positive growth in activity shows that better rates are essential for bringing new buyers into the property market and has seen Real Estate teams across the country blooming with new clients. Many of these instructions have been successful too with mortgage approvals risingto their highest level in two years, with 64,900 approvals in August.

UK house prices have also climbed for the third consecutive month in September as falling mortgages rates boost the property market. This is the strongest growth rate observed in the sector since November 2022.

For first-time buyers the average amount paid is approximately £1,000 lower than it was two years ago, highlighting a positive shift in market dynamics The market appears to be on an upward trajectory, with improved activity as we move into Q4 and early 2025. Despite sometimes needing to save longer for a deposit, it seems that buyers are becoming more committed to homeownership and are considering longer mortgage terms to make buying a property more affordable.

While the North West has claimed the title for the highest growth, London continues to command the highest property prices in the UK. However, it remains below the capital’s peak of £552,592 reached in August 2022 which suggests gradual positive change across the board geographically.

Experts in the property sector suggest that the increase in instructions and activity in the housing market is thanks to enhanced mortgage affordability, strong wage growth and declining interest rates, and increasing confidence among prospective buyers. With anticipated further cuts to interest rates, this trend is likely to continue. However, legal experts also believe that housing costs do still remain a significant challenge for many so property price growth is likley to remain modest for the remainder of this year and into next.

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