Inflation drop welcomed with the budget on the horizon 

Inflation made a surprise drop to 1.7% last month, marking the lowest rate in three and a half years. This unexpected decrease could pave the way for an interest rate cut at the Bank of England’s next monetary policy committee meeting.

Lenders are already responding by cutting rates, which is enticing buyers across all price ranges. However, the possibility of tax changes in the new government’s upcoming Budget is creating caution among investors, second homeowners, and those with multiple properties.

Nearly a third (32%) of homes for sale on Zoopla are now listed as ‘chain-free’. In London, 2- and 3-bedroom houses are particularly likely to be chain-free, a trend that could benefit buyers looking for faster transactions.

Halifax reports that mortgage affordability has been easing thanks to strong wage growth and falling interest rates. This has boosted confidence among potential buyers, with mortgage approvals rising by over 40% in the past year, now reaching their highest level since July 2022.

While improved mortgage affordability is expected to support buyer activity—especially with anticipated further interest rate cuts—housing costs remain a challenge for many. As a result, Halifax forecasts that property price growth will remain modest for the rest of this year and into the next.

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