October’s increase in asking prices masks a more uneven market, with higher borrowing costs weighing on affordability and agreed sales below last year’s level.
LONDON: Rising mortgage costs are putting pressure on British homebuyers, with Rightmove’s latest housing figures showing that affordability concerns are spreading to parts of the market where prices had previously proved more resilient.
The average asking price of a newly listed home reached £371,015 in October, an increase of £3,575 on September.
Borrowing costs climb
The average two-year fixed mortgage rate in Rightmove’s October report rose to 5.55%, compared with 5.29% the previous month and 4.25% in February, according to reporting by The Intermediary.
Rightmove property expert Colleen Babcock said higher borrowing costs were beginning to influence sellers’ pricing in cheaper areas of Great Britain, affecting the locations and types of property buyers could afford.
Monthly rise falls below seasonal norm
Asking prices increased by 1% during Rightmove’s October reporting period, which covered properties marketed between 13 September and 10 October.
Reuters reported that the rise was below the usual October average of 1.3%. The survey is not seasonally adjusted, and asking prices typically increase at this time of year.
Rightmove’s index tracks properties coming to market. It measures sellers’ asking prices, which can differ from the amounts buyers ultimately pay when transactions complete.
Regional picture remains uneven
The national increase concealed monthly falls in four of Great Britain’s lower-priced regions.
New seller asking prices fell by 2% in the North East, 1.9% in Scotland, 0.6% in the North West and 0.3% in Wales, The Intermediary reported. Yorkshire and the Humber recorded a 0.3% increase.
London’s asking prices rose 2.5% month-on-month but remained 1.7% below their level a year earlier.
Buyers have more choice as activity softens
Agreed sales across Great Britain were 8% lower than a year earlier. Buyer enquiries fell 9%, while the number of new listings increased 3%.
The stock of homes available for sale remained at its highest level for this time of year since 2014.
Babcock said sellers were responding differently to affordability pressures: some could reduce their expectations, while others needed to hold their price to make an onward move possible.
The forthcoming Budget is another source of uncertainty. Rightmove’s assessment, reported by The Intermediary, suggests buyers and sellers are waiting to see how the announcement could affect borrowing conditions and their ability to move.
