Predictions that UK house prices would soon start to fall due to the economic situation have proven unfounded so far, as the property market continues to defy gravity.
Rightmove’s House Price Index for September describes the market as “surprisingly resilient” and the average asking price of new property coming onto the market has risen by 0.7 per cent to £367,760.
That figure will, of course, usually be substantially more than the amount many homes will eventually sell for, but it does go to show that anyone contacting estate agents in Croydon looking to sell their home may do so with some confidence that they don’t need to trim their asking price much, at least yet.
Over the last ten years the typical increase in asking prices in September is 0.6 per cent, so this is in line with longer-term trends. The question some will ask is whether this can last much longer with the cost of living squeezed, interest rates being raised several times and the Bank of England declaring that Britain is probably already in a recession.
A key factor is that, despite these issues, buyer demand is up 20 per cent on pre-pandemic levels, while Rightmove notes the stamp duty changes announced by the government may incentivise the market.
Rightmove’s director of property science Tim Bannister said the key is for sellers to price property realistically. He remarked that it is as “important as ever” to be competitive with pricing as there is a “fine line between a realistically priced home and a home that feels overpriced when many buyers are making every pound count.”
While some expect the stamp duty move to support prices, economist Jim O’Neill told Bloomberg he believes the government’s recent ‘mini budget’ was a “naïve” exercise that will prompt a yet tighter monetary policy from the bank of England, which will mean the long upward trend in house prices is “essentially over”.