As the UK battles the highest inflation rate for four decades and rising interest rates, there was further weak economic news coming from the world’s fifth-largest economy.
According to a survey by property website Rightmove, asking prices for UK homes being put up for sale increased by 0.3% last month. May’s increase was the smallest increase since January this year. The rising energy costs and soaring inflation continues to impact UK households.
Asking prices for homes put on sale between May 15th and June 11th were 0.3% higher than a month earlier, down from a 2.1% increase the month before
When comparing on an annual basis, asking prices are up 9.7%, less than the 10.2% increase recorded for May.
Rightmove director Tim Bannister said:
“The exceptional pace of the market is easing a little, as demand gradually normalises and price rises begin to slow, which is very much to be expected given the many record-breaking numbers over the past two years.”
More Cooling Ahead?
With inflation hitting a four-decade high at 9% in May, and interest rates being raised earlier this month, the signs are not for the UK housing market.
After enjoying a pandemic boost, spurred by Government incentives and a desire for people to find bigger, more spacious properties during the lockdowns, the market is definitely cooling from a peak.
Yet despite the obvious cooling in house prices, all is not quite lost in the UK housing market. There are bottlenecks in house purchases. According to Rightmove, the legal conveyancing process for purchasing a home now takes an average of five months. This is 50% longer than in 2019.
Rightmove also said that the number of prospective buyers per home on offer was still over double its level before the pandemic, and 6% higher than the same time last year. However, Rightmove did not that this had dropped by more than 8% since last month.
