UK house prices fall as rate cut expectations rise, according to Investing.com

In the UK, the average asking price for homes fell slightly this month, according to the latest survey by Rightmoo, with signs that buyers are delaying purchases in anticipation of a potential interest rate hike by the Bank of England. The property website noted that the average asking price for homes listed between June 9 and July 6 was £373,493, representing a 0.4% drop on the previous month.

The decline in asking prices unadjusted for seasonal variations was somewhat steeper than the typical decline seen in July. However, asking prices increased by 0.4% compared to the same period last year.

The property market slowdown is also reflected in other measures, amid delayed expectations of a Bank of England interest rate cut due to stagnant wage growth and cost pressures. As of Friday, investors estimated the probability of a rate cut on August 1 to be nearly 50%. Upcoming wage and inflation data expected later in the week could affect these probabilities.

The recent July 4 election, which saw Keir Starmer’s Labor Party win by a significant margin, is expected to have a positive impact on property market sentiment. Rightmove believes the Bank of England’s rate cut, which will be the first in more than four years, combined with renewed political stability, will lead to a more moderate market in the second half of the year. Tim Bannister, director of asset science at RightMove, said improved affordability and a more optimistic outlook will set the stage for a positive market in the autumn.

In December 2019, housing affordability was an important issue during the election campaign, with house prices rising by nearly 20% from the previous election. The New Labor administration aims to address this, with a focus on affordability and committed to increasing house building. pressing issue.

At the time of reporting the exchange rate was US$1 to £0.7702.

Reuters contributed to this article.

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