Max Turner from the new homes team at Savills discusses the latest housing outlook.

As we enter 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.

Underpinned by a slightly better than expected economic performance alongside greater stability in mortgage costs, buyer activity looks to be picking up.

As market confidence increases, commitment has also improved – with new buyer registrations ahead of where we expected them to be.

The more optimistic outlook has prompted Savills to upgrade its mainstream five-year house price forecasts, which are now expected to grow an average of 2.5% in 2024 (revised from a fall of 3.0%) and by 21.6% by the end of 2028 (revised from 17.9%).

In the East of England, average mainstream prices are expected to rise by 1% in the next 12 months (revised from a fall of 3.5%) and by 18.1% by the end of 2028 (versus a previous predicted rise of 17.9%).

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. Our schemes at Barleyfields in Debenham, The Lawns in Stonham Aspal and Tayfen Court in Bury St Edmunds are all proving popular.

More generally, several developers are also continuing to offer incentives to help make purchases more affordable – from contributions towards the deposit and offering a discount on the purchase price, through to helping with mortgage repayments or ‘refer a friend’ initiatives.

Some of the larger housebuilders are also offering reduced rates and smaller deposit mortgages under the Own New scheme, while, on eligible developments, the First Homes initiative continues to offer first-time buyers a discount of anywhere between 30% and 50% of full market value.