UK housing market rebounds after BoE rate cut

UK housing market gained momentum in September, following the Bank of England’s first interest rate cut in over three years and supported by increased political certainty after the July 4 election, according to property website Rightmove.

The average asking price for homes rose by 0.8 per cent, rebounding from a 1.5 per cent drop in August, marking the biggest September increase since 2016.

Year-on-year, prices were up 1.2 per cent, with the average home now priced at £370,759 ($487,140).

Tim Bannister, Rightmove’s director of property science, attributed the recovery to the new Labour government led by Prime Minister Keir Starmer and the BoE’s rate cut.

However, he cautioned that uncertainties remain, including the timing of future rate cuts and potential impacts from October’s Autumn Statement.

Despite these concerns, Rightmove reported a 27 per cent increase in sales compared to a year earlier, driven by lower borrowing costs.

The average five-year fixed mortgage rate fell to 4.67 per cent, down from 6.11 per cent in July 2023.

Other housing indicators, including a Royal Institution of Chartered Surveyors report, showed improving market sentiment.

Britain’s finance minister, Rachel Reeves, is set to deliver her first annual budget on October 30, amid ongoing challenges in housing supply.