UK house sales rise since the Covid-19 boom as lower mortgage rates spur activity

LONDON — Lower mortgage rates are sparking an uptick in the U.K. housing market, following a surge in the pace of home sales last month, data showed.

Agreed home sales rose by 25% year-on-year in the four weeks to Sept. 22, marking the fastest pace of growth since spring 2021, "as households that have held off making moving decisions over the last 2 years return to the market," according to research published Thursday by property portal Zoopla.

Home buyer inquiries also increased by 26% annually over the same period, the data shows.

Shares of U.K. homebuilders Taylor Wimpey and Barratt Developments both rose more than 2.1% following the data release.

It comes as house prices ticked up at their fastest pace in almost two years in September, according to Nationwide, rising 3.2% year-on-year from 2.4% in August, when lenders began slashing borrowing costs in response to the Bank of England's first interest rate cut in over four years.

Mortgages rates have now fallen to an average of 4.57% for a five-year fixed term, down from 5.53% last year, according to the latest data compiled by property portal Rightmove. Some rates for such products have dipped to 3.7%, well below the BoE's 5% key rate.

"Lower mortgage rates are delivering a much-needed confidence boost to homeowners, many of whom have sat on the sidelines over the past two years," said Richard Donnell, executive director at Zoopla, said in the report.

Mortgage approvals rose in August to the highest level in two years in years, the Bank of England said Monday.

Market watchers are now awaiting the BOE's Nov. 7 meeting for further movement on borrowing costs, with Governor Andrew Bailey telling the Guardian Thursday that the Bank could be a "bit more aggressive" on rate cuts if