Atom bank comment on ONS Private Rent and House Prices data

19 June 2024

Richard Harrison, Head of Mortgages at Atom bank, comments:

“House prices have risen for two months in a row now, a clear symptom of improved levels of optimism among buyers. Would-be purchasers are feeling more confident about pushing on with transactions, however this morning’s inflation news has seemingly dampened economists expectations around any imminent cut to base rate, which will clearly impact mortgage rates.

“While there are mixed messages around the immediate prospects of the market, estate agents are reporting significant jumps in the number of prospective buyers registering with them, at a faster rate than increases in supply, and that is driving prices higher. That is feeding through into increased activity levels, with estate agents seeing the number of agreed sales improve to the highest level in two years.

“Crucially, the increased demand is coming from a broad range of would-be buyers, including those classed as ‘near prime’. While the headline inflation rate has fallen, we are only likely to see growing numbers of potential purchasers fall into this category, given the rising costs we have all faced, and if they are to enjoy a path to homeownership then it is vital lenders take a more accommodating approach.”