May’s base rate reduction has helped to restore buyer confidence and brought bidders back to the market, says Auction House.
After the new Stamp Duty thresholds came into effect on the 1st April, interest in the property market notably cooled. However, when the Monetary Policy Committee (MPC) announced that they would be cutting the base rate, confidence began to return with more bidders registering their interest in auction properties.
Bidder numbers rise
After the announcement on the 8th May that base rate would be dropping by 0.25 percentage points to sit at 4.25%, Auction House has seen a clear increase in interest from buyers.
This is most clearly reflected in their weekly national online auctions. After the drop was broadcast, bidders for their 12th May auction soared by a massive 128%. This figure rose yet again for their auction on the 19th May, marking a further 39% increase on the week before.
Restored confidence
These improved bidder numbers reflect the renewed confidence of buyers and investors in the wake of the base rate cut. Although only a small reduction, this decrease has already been reflected in lower mortgage rates, improving affordability significantly over the lifetime of a loan.
The lower base rate has also had a positive impact on the yields and mortgages of investors, prompting them to re-engage with the market, reassess their portfolios and snap up promising properties. With rental demand staying high and the number of homes up for sale remaining at a decade-high, there are plenty of opportunities available.
Inflation for April was higher than expected, but with gentle and gradual reductions to base rate still being forecast for the remainder of the year, it is likely that this renewed positivity will continue. This will particularly be the case for larger landlords. “Appetite among those with larger property portfolios remains strong,” commented Oliver Prior, National Commercial Director of Auction House. “This is due to their greater financial headroom and longer-term view of the market. As a result, they will be using this base rate cut to secure the most competitive mortgages and snap up properties with profit potential.”
Find out more about buying and selling with Auction House
With market conditions becoming more favourable, buyers and investors can discover their next purchase on Auction House’s website.
Alternatively, sellers can find out if they can capitalise on renewed buyer interest by booking a free, no-obligation valuation.
