3 months ago • 2 mins
What’s going on here?
British houses got pricier for the second month in a row.
What does this mean?
Tight budgets and steep mortgage rates – a result of higher interest rates – mean most Brits have been too focused on stretching their paychecks to even think about buying a house. Hopeful sellers, then, have been pulling down their asking prices to attract any lingering buyers. But if you were holding out for a steal, you might’ve missed your chance. House prices ticked up by 0.5% in November from the month before, after getting 1.2% more expensive in October. Combine that with Bank of England (BoE) figures that showed more mortgages were approved in October than either of the two months before, and the housing market seems set for a revival.
Why should I care?
Zooming in: Honey, I shrank the housing market.
Investors thought British house prices could fall as much as 10% this year – and yet, Halifax plotted them at just 3.5% below last year’s peak. In fact, at £283,615 ($356,590) in November, the average home was £44,000 ($55,314) pricier than in pre-pandemic January 2020. But that’s not because buyers were chomping at the bit. More likely, it’s down to a shortage of houses, forcing hopeful homebuyers to bid more to beat their competition. That wasn’t helped by a steadier-than-expected job market, which meant only a few homeowners had to sell to free up cash, capping the number of properties for sale.
The bigger picture: This could all just blow over.
The BoE’s interest rates seem to have worn down inflation, so some investors think the central bank could cut rates and ease the pressure on the economy as soon as mid-next year. That would bring mortgage rates down a peg, making it cheaper to own a house and enticing more buyers into the market. And when that happens, sellers and agents could whack some more digits on their asking prices again.
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