British House Prices Grew Higher For The Last Two Months In A Row

British House Prices Grew Higher For The Last Two Months In A Row
Reda Farran, CFA

3 months ago2 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.

UK house prices

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.

UK inflation and interest rates
Source: Statista
Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG