UK property asking prices rise at fastest pace in 10 months

BRITAIN’S property sellers boosted the prices they are asking for homes at the quickest pace in 10 months, indicating increasing confidence the market is strengthening, according to the online sales portal Rightmove.

The average asking price of homes coming onto the market rose to £368,118 (S$627,273) in March, up by 1.5 per cent from the previous month. Buyers flocked back after the cooling in mortgage rates from their peak last summer. Rightmove said prices rose 0.8 per cent from a year ago.

The report added to evidence showing a thawing in Britain’s housing market in 2024 as buyers and sellers are enticed back by lower borrowing rates. Asking prices are typically an indicator of sellers’ confidence in the market. Nationwide Building Society’s index based on its lending showed positive annual growth in prices for the first time in more than a year in February.

“We now seem to be past the bottom of the market,” said Tim Bannister, Rightmove’s director of property science. “For those who can afford to buy and have yet to take action, this may provide a window of opportunity. New sellers are feeling much more confident, with some perhaps being over-optimistic.”

However, asking prices are £4,776 below their high in May 2023, and it still took an average of 71 days for properties to find a buyer – the longest for the time of year since 2019.

Rightmove said that buyer demand is up 8 per cent on a year ago, while sales are 13 per cent higher.

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Experts expect a stronger year for the property market after a stagnant 2023 caused by the surge in mortgage rates. However, a bounce back could be limited by mortgage rates creeping higher in recent months as traders shifted back their expectations for Bank of England (BOE) interest rate cuts.

Investors had speculated that the BOE could back a reduction in borrowing costs in May. But now they believe August will be the start of a policy loosening, helping to push up mortgage rates.

Rightmove said that the average five-year mortgage rate has climbed to 4.84 per cent, compared to 4.64 per cent five weeks ago. BLOOMBERG