LONDON (Reuters) – Asking prices for homes in Britain rose marginally this month following a sharp drop in August, but buyer affordability is expected to improve in the coming months as elevated mortgage rates ease, property website Rightmove said on Monday.
Rightmove said average asking prices for homes increased by 0.4% from the sharp 1.9% drop in the month before, but below the ten-year average of a 0.6% rise in September.
Britain’s housing market has slowed in recent months after booming during the COVID-19 pandemic as the Bank of England attempts to tame high inflation with a run of interest rate raises.
A closely-watched Royal Institution of Chartered Surveyors report last week showed a sharp contraction in the market was underway.
Tim Bannister, director of property science at Rightmove said the Bank of England’s 14 consecutive interest rate rises contributed to unusually slow activity in August.
Bannister expects a bounce in activity in the autumn as market conditions improve. Two-year mortgage rates, which hit a 15-year high earlier this year, have started to cool but are still elevated in historical standards.
Mortgage lenders Halifax and Nationwide both reported falls in selling prices in August.
Rightmove said the number of home sales was down 7% compared with 2019, before the pandemic distorted the market.
However, it said there were signs activity was starting to pick up, as the number of homes on the market rose 12% in the first week of September compared with the unusually low weekly average in August.
It said the rate of reduction in asking prices and the number of homes reduced in price hit the highest since January 2011.
(Reporting by Suban Abdulla)