Somerset housing market buoyant once again

Will Parfitt said Frome's housing market was very busy after two quiet years

Estate agents are reporting a big increase in housing market activity as people respond to the recent cut in interest rates by the Bank of England.

One agent in Frome, Somerset, said they had recently experienced their "busiest day for three years" with record numbers registering to buy and sell homes.

Prices are still high - official figures show house prices have risen for four months in a row in Somerset.

But lower mortgage rates have seen more people look to buy a home, and also to sell.

Will Parfitt has been selling homes in Frome for 26 years.

He said the last two years had been "the hardest of my career", after mortgage rates rose sharply following the mini-budget of former Prime Minister Liz Truss.

But the recent rate cut from the Bank of England had prompted many people back into the market.

He now runs the Forest & Marble agency, handling sales and lettings in Somerset.

He said: "Yesterday was the busiest day we've had in three years.

"Saturdays are booked out three weeks ahead. When that starts happening, you know the market is heading in the right direction."

Jacob is looking to move out of his Mum and Dad's home and buy his own place

Like many people in their twenties, Jacob Derrick is still living with his mum and dad in Midsomer Norton. At 24, he is working in IT and earns a good salary.

"There's been no way I could afford to buy a place," he says, remembering the last four years.

Now, as interest rates start to come down, he is hopeful he might just crack the housing market.

"I've noticed a massive increase in people selling, so there's certainly a lot more to choose from."

Mr Derrick is realistic about his chances on his own. He wants to move to Bristol, where he works and has most of his social life. But he knows finding a flat in the city will be tough on a single salary.

A typical two-bedroom flat was recently found to cost £280,000 in the city, far out of reach of most people on typical incomes.

But with mortgages starting to come down, Mr Derrick is hopeful.

"It will be tough," he tells me, "but not impossible."

Housing websites have reported a 19% increase in buyers

Across the West, house prices fell throughout 2023, but recently started to tick up again, according to the Nationwide Building Society which track prices.

The Bank of England cut its base rate by 0.25% earlier in August, but the governor warned markets not to expect "a flurry" of further reductions.

Despite that, competition in the mortgage market has increased, as lenders try to win new business. Seven of the ten top lenders now have a headline rate around 4%, albeit for a large deposit and a five-year fixed term.

That means banks are betting on interest rates falling further over the next few years.

This old school house has been converted into flats, which are selling fast

In Frome, estate agent Will Parfitt has seen the impact of these lower rates.

He said: "We've already seen a lot more first-time buyers coming back into the market, and people upsizing.

"These are all driven by lower interest rates, and the confidence that they will stay that way."

He shows me an old school house, now converted into flats. A two-bed flat is on the market for £200,000.

"That will sell soon," he tells me.

Nobody thinks the days of fixed rate mortgages at 2% are coming back. But after the difficult two years experienced by people trying to buy a house, and those who work in the housing market, a few years of stable lower rates will be welcome.