3 months ago • 2 mins
What’s going on here?
Asking prices for homes in the UK posted their biggest wobble for five years.
What does this mean?
British property company Rightmove tracks asking prices around the country, capturing the initial asking price of almost every house up for sale. And this lot of stats is less than reassuring: asking prices slipped by 1.7% between October and November, the biggest fall at that time for five years, with London’s prices stripped back by 2.1%. See, high interest rates have made mortgages prohibitively expensive, so sellers have been forced to slash more than £6,000 ($7,320) off their homes to attract any buyers still in the market. But even with an average asking price of roughly £362,000 ($443,500), the lowest since the end of last year, there were still 10% fewer sales made than the same time in 2019.
Why should I care?
For markets: Not-so-mates rates.
Rightmove’s tracker indicates that the housing market’s backbone is weakening under the weight of high interest rates and economic uncertainty. Mortgage rates are triple what they were in 2022, and with 1.6 million fixed-rate mortgages due to expire next year, plenty of homeowners will soon be facing higher monthly payments. That’s a rough prospect for Brits who are already contending with wallet-emptying prices for everyday must-haves.
The bigger picture: The market’s pros could be a con.
In fairness, prices haven’t crashed – yet, anyway. Instead, they’ve been working their way down slowly to land just 3% below their May peak. And if anything, the rental market is too strong, with rising mortgages trickling into lease prices with a lag and pricing out plenty of hopefuls. Plus, newly optimistic builders seem to be anticipating a turnaround in the not-too-distant future. Thing is, all of those factors could be down to a limited supply of homes, rather than a projected one-eighty in demand.
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