The Bloomberg Intelligence homebuying survey revealed that 41.5 per cent of prospective buyers were accelerating their plans, compared to 35 per cent in the middle of last year and 31.2 per cent in October 2022.
The survey’s respondents comprised 1,000 people with a minimum household income of £45,000 who are planning to buy a home in the next two years.
Iwona Hovenko, senior real estate analyst at Bloomberg Intelligence, said: “The easing of mortgage rates from 2023 highs is helping to revive UK housing activity.”
It was suggested that higher property values this year were behind the decision to press on with a house purchase, as the share of respondents citing this rose.
In contrast, fewer respondents said they were pausing or significantly delaying their moves. Some 8.5 per cent said they were putting off moving, compared to around 13 per cent last summer and autumn 2022.
Bloomberg Intelligence said that, even among those delaying a move, a smaller proportion cited falling house prices as the reason. Some 8.6 per cent listed this as their reason, compared to 16.1 per cent in June last year.
The firm said the belief that house prices would rise, leaving buyers priced out of the market, could become a “self-fulfilling prophecy”.
Mortgage rates still an obstacle
Bloomberg Intelligence said that, although UK homebuyers seemed to be more optimistic, high mortgage rates were still posing a challenge to some.
Some 34.7 per cent of respondents who were postponing a purchase said they were waiting for mortgage rates to fall, up from 30.2 per cent last summer.
In contrast, a smaller proportion of respondents said they were going ahead with purchase plans to lock in lower rates, with 14.8 per cent saying so, compared to 17.7 per cent in June 2023, suggesting this was not a main motivator.
The increased cost of living also caused 26.5 per cent of respondents to push back purchase plans, up from 22.4 per cent in June last year.
Limited appetite for long-term fixes
While the unpredictability of mortgage rates prompted many to make a decision on their plan to purchase, the survey indicated a lack of interest in long-term fixed mortgage rates.
Just 7.6 per cent of respondents said they chose or were looking to go for a 10-year fix, which was down from 8.3 per cent in the middle of last year and 9.1 per cent in October 2022.
First-time buyers in London were more open to 10-year fixes, with 19.7 per cent seeing them as a good option compared to 10.3 per cent of people outside the city.
Five-year fixed deals were the most popular choice, with 27.5 per cent of respondents saying this was the term they had chosen or would choose. This was a slight fall on the 28.9 per cent who said the same last summer. This was followed by the 20.3 per cent who would or did choose a two-year fix, up from 18.9 per cent in June 2023.
Hovenko added: “Calls for legislation supporting longer-term mortgage-rate fixes – which would aid the housing market and insulate homeowners from interest-rate fluctuations – could be met with a lukewarm reception from UK buyers, our survey suggests.
“The high cost and limited flexibility might be the primary hurdles, especially given nearing rate cuts.”
