Asking prices for UK homes rise sharply in September

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Asking prices for UK homes rose at twice their long-term average pace in September, as post-election stability and declining mortgage rates helped to fuel a rebound in buyer demand and draw more sellers to the market.

The average asking price rose to £370,759 in the four weeks to mid-September, up 1 per cent from the previous month, according to data released by the property portal Rightmove on Monday.

In September, prices typically tick up following the summer period. But this month’s increase, which followed a 1.5 per cent fall in August, was double the long-term average of 0.4 per cent, according to the portal.

“The autumn action has started early with a strong rebound in activity from both buyers and sellers compared with the subdued market at this time last year, continuing the momentum from the better than expected summer market,” said Tim Bannister, Rightmove’s director of property science.

He added that “the certainty of a new government” followed by the first Bank of England rate cut in four years had “invigorated the market, opening a window of opportunity for movers to act”.

Markets expect the BoE to keep interest rates on hold when policymakers next meet on September 19, with another cut forecast in November. Further rate cuts are expected in 2025, after inflation retreated to 2.2 per cent in July from its multi-decade high of 11.1 in October 2022.

The monthly growth was driven by larger properties with the cost of four-bedroom, detached properties and larger houses rising by 0.8 per cent.

The average asking price of three and non-detached four-bed properties rose by a monthly rate of 0.7 per cent, while smaller property costs registered a much weaker expansion of 0.2 per cent.

In August, the BoE cut interest rates by a quarter point to 5 per cent, marking the first reduction in borrowing costs since the start of the pandemic.

Asking prices were up 1.2 per cent from September 2023, marking the fastest annual rate in more than one year.

Expanding real wages are also supporting housing demand, with 27 per cent more sales agreed in September than in the same period last year.

The Rightmove house price index, which is compiled from properties coming on to the market through more than 13,000 estate agency branches listed on the portal, also pointed to the increased availability of properties.

Homeowners appear “more confident” to come to market, said Rightmove, with the number of new sellers up 14 per cent from last September, and the average number of available homes for sale per estate agent at its highest since 2014.

Bannister said he expected the “market momentum” to continue but warned of “question marks” over how the sector will be affected by announcements in the Budget next month.

Nathan Emerson, chief executive of Propertymark, a membership organisation for estate agents, expressed similar concerns and suggested the figures indicated a pre-Budget rush to the market.

He said it was important to consider “if the figures reflect a keenness by consumers to complete on a property before any potential changes to the current tax structure might be announced”.