UK housing market frenzy shows signs of slowing, Rightmove says

ASKING prices for UK homes rose to a new record for a fourth-straight month, though there are signs the market is starting to ease.

Rightmove said prices sellers are seeking when putting properties on the market rose 2.1 in per cent in May, the highest for the month since 2014. That marks a £55,551 (S$95,849) jump since the housing market was halted at the start of the pandemic, almost 10 times the £6,218 increase in the 2 previous years.

The figures underscore the headache for the Bank of England, which wants to quell inflation after it reached a 40-year high. The bank has raised interest rates at each of its 4 past meetings, though that’s adding to a cost-of-living squeeze on consumers. Rents, too, are 40 per cent higher than 10 years ago and increasing at the fastest pace on record, Rightmove said.

“We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year,” said Tim Bannister, a director at the property website. “A combination of more supply of homes and people weighing up what they can afford will help to moderate the market.” 

The report, released on Monday (May 23), also showed that:

• Average monthly mortgage payments are now higher than rental payments for the first time since August.
• The typical monthly payment for a first-time buyer has risen 13 per cent since December. That’s only 11 per cent higher than a decade ago.
• There was a “desperate” shortage of 2 and 3-bedroom semi-detached homes coming to market, boosting prices.
• Solo first-time buyers now need a 34 per cent deposit compared to 25 per cent 10 years ago. BLOOMBERG