Rightmove Reveals Slower Post-Summer House Price Increase Since 2008
New data has revealed that house prices in the United Kingdom are seeing their slowest growth for this time of the year since the 2008 financial crisis. The impact of higher interest rates has become increasingly evident in the housing market.
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What Did the Report Say About UK Property Prices?
According to the latest report from the property website Rightmove, the average new asking price increased by a modest 0.5% from October 7th, reaching £368,231. However, this represents the smallest post-summer increase in house prices since the 2008 crisis.
Over the past 12 months, house prices have experienced a decline of 0.8% as the reduced activity in the housing market takes its toll, as reported by Rightmove. This decline is accompanied by a significant drop of 17% in agreed house sales compared to the previous year.
Earlier this month, separate data from Halifax Bank highlighted the steepest fall in annual house prices in 14 years, a trend observed in September.
The Bank of England has been actively raising interest rates to curb inflation, marking 14 consecutive rate-setting meetings until the previous month. In September, the Monetary Policy Committee held its key rate at 5.25%, which remains the highest since the financial crisis in 2008.
Learn more about the current UK interest rate in our recent forecast.
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What Do the Experts Think About These Subdued Property Price Increases
In the Rightmove property report, Tim Bannister noted that post-summer asking price increases are customary but have been “much more subdued” this year as sellers adapt to the weaker market.
Estate agents have described the current market as “the most price-sensitive ever.” Although the number of inquiries for each property listed on their website is still up by 8% compared to 2019, before the COVID-19 pandemic.
As a result of these market conditions, renters are feeling the pressure. Housing shortages persist in many parts of the country.
Estate agent Hamptons reported that the average rent in the UK rose to £1,325 per month in September, up from £1,186 a year earlier. The most significant rent increases were observed in outer London, where prices rose by an average of 16.2%, while Wales saw the slowest rental price growth at 5.2%. On average, rents across the UK increased by 11.7%.
While the cost-of-living crisis, inflation and high interest rates continue to affect spending power, the current market conditions represent a potentially lucrative opportunity for buy-to-let investors to enter the market. Price growth is expected to pick up again in 2025. As such, prices will not stay as low as they are now for much longer.
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