The UK housing market has entered September with a shift in asking price trends, as Rightmove recorded the first monthly increase since May. Average asking prices for newly listed homes rose 0.7% between 9 August and 12 September, taking the average to £367,440. The increase of £2,441 was slightly above the typical September rise of 0.5% recorded over the previous decade.
The change follows a 2.0% decline over the preceding four weeks and marks a notable reversal in the direction of asking prices during the summer. However, the wider data remains mixed. Average asking prices were still 0.8% below the same point a year earlier and 2.3% below their level at the start of the summer. Rightmove characterised the September movement as a modest recovery rather than a major turning point, leaving the durability of the improvement as an important consideration for the months ahead.
The seasonal return of buyers and sellers appears to be supporting the change in activity. September traditionally brings an increase in housing market activity after the summer period, and the latest figures indicate that buyer interest has picked up. Yet the level of enquiries remains 9% below the same period last year. New listings were also 3% lower year on year, while agreed sales were down by 9%, suggesting that the improvement in asking prices has not yet translated into a comparable increase in transactions.
The number of homes available to purchase has reached a 12-year high for this time of year. That leaves sellers operating in a more competitive environment, with a larger pool of properties available to buyers. The proportion of homes finding a buyer also varies considerably by region, with 91% in Scotland compared with 71% in the North West of England and 42% in London. The figures underline the differences in market conditions across the UK and the importance of local supply and demand when assessing pricing.
Mortgage costs remain an additional constraint on affordability. The average two-year fixed mortgage rate tracked by Rightmove increased to 5.29% from 5.09% the previous month. The rise adds pressure to household monthly budgets and may contribute to uncertainty among potential movers considering the cost of financing a purchase. The wider borrowing environment has also been affected by uncertainty linked to the conflict in the Middle East.
The latest figures therefore present a market in transition rather than a straightforward change in direction. The September increase provides evidence of renewed pricing activity as the autumn market gets under way, while the annual decline, elevated housing stock and weaker buyer enquiries indicate that demand remains below last year’s level.
Finsbury Growth & Income Trust Plc (LON:FGT) invests in the shares of predominantly UK-listed companies, with the objective of achieving capital and income growth.
