U.K. Housing Market Growth Slows as Record Prices Deter Buyers
U.K. Housing Market Slows, Propped Up by People Leaving London
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U.K. house price growth slowed in June as record prices and a lack of properties to purchase drained momentum from the market, Rightmove said.
The nation’s largest online property portal said prices grew 0.8% this month after a 1.8% gain the month before, putting the average cost of a home at 336,073 pounds ($464,000). The increase is still the largest at this time of year since 2015, boosted by people seeking to leave London.
Bank of England policy makers have expressed concern about the pace of price growth, with Chief Economist Andy Haldane warning that the market is “on fire” and may feed inflationary forces. Rightmove’s report is the first this year to suggest any signs of a slowdown, though it also confirmed an appetite by many buyers to buy bigger properties outside urban areas in anticipation they can work from home after the pandemic.
“Lifestyle re-evaluations have taken firm root, which will lead to sustained demand, especially for rural and suburban locations,” said Nick Leeming of real estate agency Jackson-Stops. “We’re still seeing people head to countryside hot-spots in their droves. While buyers remain active, the availability of stock on the market has continued to contract.”
Strong demand is being sustained by top-of-the-ladder home-seekers. The number of sales agreed for properties over 500,000 pounds was up almost 50% in May from the same month in 2019. Cash-rich buyers from more expensive areas are the driving force in places such as Wales and the South West of England.
Earlier this month, the Royal Institution of Chartered Surveyors said prices in May rose in all regions, and agents anticipate prices will continue to climb over the next year. The gap between buyer inquiries and sale instructions ballooned to its widest since 2013, it said.
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