UK Housing Market Faces Sharp Decline in Asking Prices
London, Aug 21 – The UK housing market is experiencing a significant drop in asking prices this month, according to a survey by industry website Rightmove. The report revealed that average asking prices for homes have fallen by 1.9%, marking the largest monthly decline for August since 2018 and twice as steep as the usual summertime fall.
The slowdown in the housing market follows a period of tremendous growth during the COVID-19 pandemic. The Bank of England’s efforts to combat high inflation through multiple interest rate hikes have contributed to the weakening market. However, there was a slight reprieve for potential homeowners as two-year mortgage rates decreased from July’s 15-year highs.
In line with Rightmove’s findings, mortgage lenders Nationwide and Halifax had previously reported decreases in selling prices in July. The survey also highlighted a 15% drop in the number of home sales compared to pre-pandemic levels in 2019.
First-time buyers have been particularly affected, with sales of homes in their range declining by 10%. The decrease can be attributed, in part, to a 12% increase in rents for properties in this category over the past year.
Overall, the number of homes on the market has decreased by 10% compared to August 2019. Despite the recent decline, average asking prices remain 2% below the peak reached in May. Reflecting the surge in demand during the pandemic, prices are still 19% higher than they were in August 2019.
The current state of the housing market indicates a potential shift in the dynamics for both sellers and buyers. As rising mortgage costs prompt sellers to lower their expectations, buyers may find greater opportunities to navigate the market. However, the decrease in sales and the rising rents for first-time buyer properties suggest a challenging environment for those looking to get onto the property ladder.
It remains to be seen how the housing market will respond to the Bank of England’s interest rate hikes and other economic factors. As the situation continues to evolve, potential homebuyers and sellers will need to closely monitor market trends and adjust their expectations accordingly.
– Rightmove (www.rightmove.co.uk)
– Nationwide (www.nationwide.co.uk)
– Halifax (www.halifax.co.uk)
More detail via Reuters here… ( Image via Reuters )