BOE rate cut helps boost UK housing market but concerns remain: Rightmove
BRITAIN’S housing market recovered momentum in September, as the Bank of England’s (BOE) first interest rate cut in more than three years and greater political certainty after July 4’s election boosted activity, property website Rightmove said on Monday (Sep 16).
Rightmove added that average asking prices for homes increased by 0.8 per cent after a sharp 1.5 per cent drop in August. September’s rise was double the average for the time of year in the series and the biggest for the month since 2016.
Compared with a year earlier, asking prices were 1.2 per cent higher at £370,759 (S$631,920).
Tim Bannister, Rightmove’s director of property science, said that the housing market was invigorated by a new government and the first rate cut from the BOE since 2020.
But Rightmove noted that there were “still uncertainties ahead, including the timing of a second bank rate cut, and which segments of the market could be affected by announcements in October’s Autumn Statement”.
The BOE is expected to hold interest rate at 5 per cent on Sept 19 – although markets last week saw a 30 per cent chance of an early cut – and cooling wage growth is likely to keep the central bank on track to cut at least once more by the end of the year.
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Prime Minister Keir Starmer’s Labour government has promised to reform Britain’s planning system and has set mandatory targets to speed up housebuilding, but the shortage of home supply is likely to remain a factor driving prices for the medium term.
Britain’s finance minister Rachel Reeves is set to deliver her first annual budget on Oct 30.
Rightmove’s monthly survey also showed the number of sales agreed between buyers and sellers rose 27 per cent from a year ago as buyer demand improved on the back of lower borrowing costs.
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The average five-year fixed mortgage rate last week was 4.67 per cent, Rightmove noted, down from 6.11 per cent in July 2023.
Other measures of Britain’s housing sector have also shown improvement in sentiment after a recent fall in interest rates.
A closely-watched Royal Institution of Chartered Surveyors report last week showed a sharp jump in sales expectations in the coming months.
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