Last week, the
Bank of England's interest rate dropped to 4.5%, marking its third cut in under
a year. This decision follows a previous reduction in November 2024, with the
rate remaining unchanged in December. While most of the Bank’s policymakers
supported the move to 4.5%, a minority favoured a more aggressive cut to 4.25%,
highlighting the ongoing uncertainty surrounding the UK economy.
The decision is
widely seen as a positive step for the housing market. Lower borrowing costs
could improve affordability, boosting confidence for homebuyers and those
looking to remortgage. Activity levels in the property sector have already
shown improvement, with increased buyer registrations at the start of the year.
However, while sentiment may improve, the immediate effect on mortgage rates is
expected to be gradual as lenders respond cautiously to the new environment.
The trajectory of
further interest rate cuts will depend on broader economic stability. Although
inflation is lower than last year, it remains a key factor influencing future
monetary policy. While there is optimism that additional cuts could follow in
2025, economic volatility means nothing is guaranteed.
The latest rate
cut is expected to boost confidence in the property sector.
So, what does this mean for Northampton homeowners and buyers?
The UK property
market was already showing signs of resilience in January, so this cut will
benefit it with even more improved affordability. However, sustained growth
later in the year and beyond will depend on wider economic conditions and how
quickly lenders adjust mortgage rates in response.
Looking at the January stats, the number of UK homes
sold subject to contract in January 2025 was 98,978, a rise of 17.2% from
January 2024, when 84,509 UK homes sold stc. For comparison, only 70,277 homes
were sold stc in January 2023.
Regionally, this was mirrored in the East
Midlands, as there were 6,278 homes sold stc in January 2024, which increased
to 8,004 homes in January 2025.
Looking at all the UK regions and the number of
homes sold stc in January 2025, compared to January 2024, the East
Midlands saw the biggest jump, with sales up 27.5%, followed closely
by East Anglia, which surged 26.6%. The South East also
performed well, rising 17.9%, with the South West not far behind at 16.9%.
London saw a strong 18.1% increase, showing continued resilience in the
capital. The West Midlands climbed 14.5%, the North East was up 14.1%, and the
North West followed at 13.4%. In Yorkshire & Humber, sales increased 12.7%,
and Wales recorded a 13.9% uplift. Scotland saw a more modest rise of 5.3%,
while Northern Ireland was the only region to decline, down 3.4%.
Looking
at Northampton's picture …
·
In January 2023, 343 Northampton homes sold stc,
with an average price at sale agreed of £297,135.
·
In January 2024, 448 Northampton homes sold stc,
with an average price at sale agreed of £315,339.
·
In January 2025, 527 Northampton homes sold stc,
with an average price at sale agreed of £314,119.
(Northampton
= NN1-NN7).
House
sales in Northampton have risen 17.6% year-on-year and
an
astonishing 53.6% compared to two years ago.
Optimism has been evident among prospective buyers and
sellers throughout the last six months of 2024. This is despite mortgage
interest rates rising ever so slightly since the summer of 2024. This modest
cut in rates will do a lot to reduce mortgage rates in 2025 and thus continue
demand for property.
What about house prices in
2025?
Denton House Research continues to publish the £/sq.ft
metric on sales agreed, which has proven to predict Land Registry
figures five months in advance with a 92% accuracy. January’s final figure
for the UK sales agreed stands at £342/sq.ft, showing an upward trend
from £339/sq.ft in December 2024, £334/sq.ft in August 2024,
and £330/sq.ft in January 2024. This means UK house prices have risen
3.64% in the last 12 months.
Even with this upswing in property market activity, I
believe house price levels are likely to remain roughly stable, and the market
will continue to favour buyers due to ongoing mortgage affordability issues and
the still relatively high interest rates.
Considerations for Northampton’s property market.
This latest
data provides an opportunity for reflection.
For
Sellers:
The market is changing, requiring a more strategic, adaptable, and patient
approach. Properties are taking longer to sell, so a competitive price is
essential to securing a buyer.
For Buyers: The market
presents both challenges and opportunities. Some properties will still attract
strong competition, but many buyers will benefit from more choices and
additional decision-making time.
External
factors such as global economic shifts, inflation, and interest rate changes
could influence Northampton's property market.
Selling and buying your Northampton home: Key Strategies.
Given the
current conditions, a well-planned approach is essential.
For Sellers: Pricing
remains the most crucial factor in attracting the right buyer. Beyond that,
standout marketing will make a difference. Targeted social media campaigns and
interactive property listings can help a home stand out in a more competitive
market.
For Buyers: The
property market is different in every part of Northampton. Each area has its
trends. If you are looking for a property that is in high demand, expect
competition. Having a mortgage pre-approval in place will provide an advantage
over other buyers. Expanding the search area may also uncover hidden
opportunities. In a less competitive market, buyers have more negotiating power
on price and extras such as carpets, fixtures and fittings.
One key
point is that 81% of home sellers are also buyers. If you achieve a
lower price than expected when selling, you should gain when purchasing your
next home.
As we move
into 2025, the Northampton property market remains a mix of opportunity and
challenge. Whether you are a first-time buyer, a homeowner planning to move, a
buy-to-let investor, or someone relocating, understanding the market's trends
will be essential.
The best
approach is to stay informed, remain adaptable and remember that moving home is
about the transaction and the journey.
What are
your thoughts on Northampton’s changing property market? Do you expect any
major shifts or trends? I would love to hear your insights.
