UK home asking prices fall amid rate cut hopes

Asking prices for British homes listed this month fell as some buyers await a potential interest rate cut by the Bank of England (BOE), according to a survey from property website Rightmove.

The average asking price for properties listed between June 9 and July 6 dropped by 0.4 per cent to £373,493 ($484,943) compared to the previous month, a larger-than-typical decline for July, while year-over-year asking prices increased by 0.4 per cent.

The housing market has shown signs of slowing, with strong wage growth and persistent cost pressures delaying expectations for a BOE rate cut.

Investors estimate a 50 per cent chance of a rate cut on August 1, depending on upcoming wage and inflation data. Rightmove suggested that the political certainty from the July 4 election, where Keir Starmer’s Labour Party won decisively, might boost housing market sentiment.

Tim Bannister, Rightmove’s director of property science, highlighted that a potential base rate cut, the first in over four years, combined with new political stability could improve affordability and market confidence in the second half of the year.

Housing affordability was a key issue in the recent election, with house prices having risen by around 20 per cent since December 2019. The new Labour government has pledged to increase housebuilding, focusing on affordable housing.

Attribution: Reuters.