Bank of England governor Mark Carney's suggestion that the rate decision will "likely come into sharper relief around the turn of this year" has prompted a flurry of homebuying, new figures suggest.
Demand for houses rose 4.1 per cent in the year to July, and 5.3 per cent in the last month alone, according to figures released by Haart Monitor today. People rushed to lock in record-low mortgage rates amid mounting speculation that the Old Lady could be gearing up to hike interest rates.
The gap between supply and demand widened, with the supply of UK homes falling 15 per cent annually. Consequently there were nearly 12 buyers chasing every property which came onto the market. This was particularly acute in London, where the ratio was 20:1.
However, it said recent global market turmoil is "good news" for prospective buyers as it may have delayed the timing for a rate hike. The City had been expecting the Bank of England to raise rates next March, but this has now been pushed back to next summer.
"We saw a surge in activity when Mark Carney announced an interest rate rise was on the cards, as people looked to take advantage of some of the lowest mortgage rates on record and fix at this level before they increased," Paul Smith, chief executive of Haart, said.
"Now the economic landscape has changed following the market slowdown in China we expect greater calm on the demand side, but true balance will not be achieved until more homes start to come onto the market."