Asking prices for UK homes fall as buyers await BoE rate cut, Rightmove says
2024.07.14 19:23
By Andy Bruce
(Reuters) – Asking prices for British homes coming to the market fell this month, with signs that some buyers are waiting for the Bank of England to cut interest rates, a survey from property website Rightmove (OTC:) showed on Monday.
The company said the average asking price was 373,493 pounds ($484,943) for property put on sale between June 9 to July 6, 0.4% less than a month earlier.
The Rightmove data, which is not seasonally adjusted, often falls in July, although this decline was bigger than usual.
Compared with a year earlier, asking prices were 0.4% higher.
Other gauges of the housing market have shown slowing momentum, as expectations for an imminent BoE rate cut have increasingly been pushed back because of strong wage growth and stubborn cost pressures.
Investors on Friday assigned a roughly 50% chance that the BoE will cut rates on Aug. 1, although wages and inflation data due later this week could skew that in either direction.
Rightmove said the certainty provided by the July 4 election – which resulted in a landslide victory for Keir Starmer’s Labour Party – would probably prove positive for housing market sentiment.
But it described the potential for a cut in the BoE’s Bank Rate as a “game-changer”.
“A first Base Rate cut for over four years, together with the new political certainty, could set the scene for a positive autumn market, with improved affordability and a more confident outlook in the second half of the year,” Tim Bannister, Rightmove director of property science, said.
Affordability was a hot political issue ahead of the election, as house prices have risen by around a fifth since the last election in December 2019.
The new Labour government has promised to ramp up house-building, with an emphasis on affordable housing.
($1 = 0.7702 pounds)
