House prices continue downward trend

House prices continue downward trend

0:02 AM, 24th September 2024, About a month ago

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The housing market has experienced a summer lull, with house prices declining.

According to e.surv’s house price index, average house prices are now 2.6% lower than they were a year ago.

As the Bank of England eyes an interest rate cut in November, many hope it will revive buyer confidence in the housing market.

Affordability remains an issue

In August, the average sale price of a home in England and Wales was just over £356,000 – nearly £1,800 or 0.5% lower than the July average.

Prices for England and Wales as a whole remain about 6% below the previous peak reached in October 2022.

Richard Sexton, Director at e.surv, said: “The England & Wales data, which include cash purchases, illustrate that while the base rate cut in August was welcome, it has not transformed the picture for those wanting to move home.

“Affordability remains an issue for many potential buyers still adjusting to mortgage rates now based on expectations of slower Bank of England interest rate cuts.

“When the market sees another cut in due course we should expect that to feed into buyer confidence and increase the downward pressure on mortgage rates and, as importantly, ease lenders’ mortgage stress tests.”

Lack of supply a problem

Mr Sexton adds the lack of supply is a growing problem in the housing market.

He said: “The government’s commitment to new housing is welcome but the supply of stock remains tight and this will be the case for some time yet. The lack of supply will support the prices of the right kind of property, lifting averages more generally.

“Looking forward, we should expect the prices to pick up. Buyer registrations are growing and we should also expect borrowing rates to improve. Lower interest rates will we think further support house prices over the coming months and hopefully be enough to offset any potential headwinds buyers may encounter in October’s budget.”


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