Rolling coverage of the latest economic and financial news
Here’s Victoria Scholar, head of investment at interactive investor, on today’s reports on the UK housing market:
“Rightmove said UK asking prices rose by 0.4% in September after falling by 1.9% in August. However, the rise is below the ten-year average of 0.6%, home sales are down 7% versus 2019 pre-covid and asking price reductions reached a 12-year high. Nonetheless, the property website expects the market to pick up in autumn as mortgage rates ease. It said the number of homes on the market rose by 12% in the first week of September already.
The latest figures from Rightmove point to green shoots of recovery for the housing market with a slight pick-up in asking prices in September, a typically busy back-to-school time of year for housing market transactions after the end of the summer lull and before the festive season begins. While the Bank of England’s aggressive stream of rate hikes have hit borrowing affordability and house prices, mortgage sellers have started to offer more competitive rates to respond to dwindling demand as the central bank gets closer to the end of its tightening cycle. Despite this, it is likely that house prices will cool further this year as the culmination of high inflation, rising interest rates, the cost-of-living crisis and elevated borrowing costs take their toll.
“Looking ahead to the November meeting, we see a greater chance that sequential wage and price pressures will have cooled sufficiently to allow the MPC to go on hold, given their preference for a flatter peak.”
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