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Brighter forecast for property market

By Vicky Dudbridge, director,
Savills Residential Development Sales

Having entered what is traditionally the most popular time of year to buy and sell a home it feels like the property market is beginning to warm up just in time for summer. 


Sentiment among buyers has been steadily improving in recent months, as the economy has improved and mortgage costs stabilised. 


The more optimistic outlook has prompted Savills to upgrade its mainstream five year house price forecasts, which are now expected to grow in the South West by an average of 1 per cent in 2024 and by 18.7 per cent by the end of 2028. 


When Savills made its original forecasts back in November, a 75% loan to value two-year fixed mortgage from Nationwide cost 5.34% - and mortgage approvals were down below 50,000 per month.

Today, while the bank base rate remains at 5.25%, the cost of the same Nationwide two-year fixed-rate mortgage now stands at 4.84%, while a five-year fix carries an interest rate of 4.50%. The number of mortgage approvals has also increased. 


The improved confidence has translated into more activity in the new homes market with viewings and reservations both up on last year. 


The appetite for property in Bath remains strong. A notable difference is the return of the chain-led buyer. Just a few years ago, many buyers were happy to purchase a new home before selling their existing property – now the vast majority are looking to sell first. 

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Good schemes with plenty of choice are continuing to prove popular, Holburne Park being a great example. Thanks to its excellent location, less than a mile from the centre of Bath, beautiful parkland setting, and traditional yet contemporary homes, it attracts a diverse mix of buyers. 


In the last few months alone, we have sold homes to professional couples, families and a number of retirees. About a third are moving to Holburne Park from other parts of the UK – and beyond – however the majority are from in and around Bath. Notably, several recent sales were to families moving within Holburne Park, which is lovely to see, and a real testament to the quality of the scheme. 


All homes at Holburne Park are now build complete and ready to move into, so buyers have that certainty in knowing what mortgage rate they will be paying at the point of purchase. 

Looking ahead, affordability and the cost of debt remain the biggest factors in the property market. The fall in inflation to 2.3 per cent in the year to April indicates that we will see two or three cuts to the bank base rate this year, which paves the way for a relatively stable mortgage market, with the prospect of lower borrowing costs as the year progresses. And, with the general election coming sooner than expected, we should see a lot of uncertainty behind us, making room for more momentum among buyers. 

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Savills Bath

21 Milsom Street | Bath | BA1 1DE

01225 474 500

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