UK house asking prices rise again, prompting brighter outlook

UK property asking prices rose to a record for a sixth consecutive month, indicating momentum in the market that may support the market for the rest of this year.

The property-search website Rightmove said asking prices rose 0.4 per cent from June after an 0.3 per cent gain the month before. The average price is now £369,968 (S$614,821) which is 26 per cent higher than the same month before the pandemic in 2019.

Rightmove raised its forecast for price growth this year to 7 per cent from 5 per cent, saying a lack of new properties coming to market will keep the overall cost from falling. That indicates strength in the market that may persist despite a squeeze on consumer finances and increasing borrowing costs.

"Demand is moving the market from a boil to a simmer," said Tim Bannister, Rightmove's director of property science. "With such an imbalance remaining between supply and demand, prices look underpinned."

First-time buyers taking out a mortgage now are paying 20 per cent more on average than in January after the Bank of England lifted its benchmark lending rate. Borrowers have moved toward locking the rate they pay for longer terms.

Rightmove said buyer demand has increased by 26 per cent since 2019 while available listings fell 40 per cent. With home prices spiralling ever higher, many potential buyers are struggling to afford a rung on the housing ladder.

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"Having more new sellers this month is a win-win for the market, as these sellers will likely achieve good prices for their homes," Bannister said.

Buyers are motivated by a desires to relocate, often to bigger houses outside urban areas with space for a home office. A separate report on Saturday (Jul 16) from Halifax said the number of people relocating in London fell more than in any other region.

"The market in London is self-correcting, with many likely priced out of moving in and around the capital," said Andrew Assam, homes director for the mortgage lender. BLOOMBERG