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UK house price growth was muted this month by October’s usually loftier standards, numbers from Rightmove showed on Monday, though the property portal noted some calm is returning to the mortgage market.
According to Rightmove, UK house prices rose 0.5% on-month in October, quickening slightly from September’s 0.4% rise. However, this month’s rise is markedly cooler than the 1.4% ‘historic norm’ house price expansion usually delivered in October.
‘New seller asking prices have seen a rise, as they usually do at this time of year following the summer holiday season. While this year’s much more subdued rise indicates that some new sellers are gradually heeding their agents’ advice to price competitively, agents report that other sellers still need to adjust their expectations on the price that they are likely to achieve in the current post-pandemic, lower-activity market, where six in ten homes are now selling rather than eight in ten,’ Rightmove analyst Tim Bannister said.
On an annual basis, house prices fell 0.8% in October, a steeper decline than September’s 0.4%.
Easing some of the pressure on homeowners, Rightmove noted that average fixed mortgage rates have cooled for 11 weeks on the trot. The average five-year fixed rate mortgage rate has eased to 5.43% from 6.08% during the period.
Bannister added: ‘Mortgage rates continue to trend in the right direction and have now dropped for 11 consecutive weeks, with buyer affordability gradually improving compared to this time a year ago. Those with a larger deposit have seen the biggest benefit from recent rate drops, with rates for those with a smaller deposit, typically those further down the housing ladder, not dropping as quickly. The mortgage market is much more stable right now compared to three months ago, giving movers a little more assurance over the rate they are likely to be offered and therefore what they are likely to be able to afford.’
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