The UK property market recorded a slight increase in sales prices in October, with a slight increase of 0.3%, according to a report from property portal site Rightmove. This rate of increase is lower than the normal monthly increase of 1.3% in October. The market also saw a 12% year-over-year increase in the number of homes sold, and vacancies per real estate agent were at their highest since 2014.
Despite the slow recovery in sales prices, activity across the real estate market remains strong and buyer demand continues to increase. Compared to the same period last year, the price increased by 1.0%.
Rightmove’s head of real estate science said some potential buyers were taking a wait-and-see approach, hoping for further reductions in borrowing costs from the Bank of England and seeking clarity in the next government budget. He expressed optimism about the market’s trajectory through 2025, citing strong activity despite affordability concerns. He suggested that post-Budget certainty and expected central bank rate cuts could boost market optimism similar to what was experienced over the summer.
The next budget, to be tabled by UK Chancellor of the Exchequer Rachel Reeves on October 30, 2023, is expected to impact the property market, with potential changes to taxes. While some taxes are expected to increase, Reeves was adamant that taxes on “working people” would not increase. The Times reported that the current stamp duty threshold increase is unlikely to be extended beyond the March deadline.
Additionally, the Bank of England is expected to cut its benchmark interest rate at its November meeting and possibly again in December. This comes as mortgage rates fell after borrowing costs were cut in August for the first time in more than four years. However, Rightmove said the decline in mortgage rates was slowing, with the average five-year fixed mortgage rate rising to 4.61% from 4.55% the previous week, the first weekly increase since May. He showed his perspective.
Reuters contributed to this article.
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