What’s going on?
The British housing market took a slide in September, sending hopeful sellers back by more than a few places.
What does this mean?
UK house prices were staying true to the country’s spirit, remaining stoic and unemotional in the face of economic uncertainty. But a tremble on an upper lip quickly opened the floodgates, and property prices headed south, fast. September’s 0.4% drop from the month before means folk sold their keys for nearly 5% less than the same time last year, according to UK lender Halifax. That difference was slightly smaller in London, while the South of England saw the biggest change.
Why should I care?
For markets: I’m holding out for a bargain.
September’s price dip was a lot less steep than August’s, though, which Halifax believes is a sign that prices are about to hit their lowest point. But property experts disagree: they reckon prices will end up about 10% lower than before they started falling. Either way, inflation will likely call the shots. If it hits the Bank of England’s 2% target over the next few months, mortgage lenders will anticipate lower interest rates and bring down their own borrowing rates. Would-be homeowners, then, should keep an eye on the next inflation reading, out on October 18th.
Zooming out: Alexa, play Bills, Bills, Bills by Destiny’s Child.
The British rental market’s moving in the complete opposite direction, with online property firm Rightmove saying rents jumped by 12% in August from the month before. That means regular tenants are scrambling to find £1,300 ($1,590) on average every month to put a roof over their heads. And unfortunately for renters, those bills could build: interest rates are still sending landlords’ mortgages higher, and those increases tend to be funneled into rents with a delay.
Originally Posted October 9, 2023 – The Property Ladder
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