The average reduction is also the biggest since January 2011 and comes against the backdrop of a weak housing market, with the Bank of England pushing up the cost of borrowing, including mortgages, to curb soaring inflation.
Sunday 17 September 2023 11:27, UK
More than a third of homes for sale had at least one price reduction, the highest rate in more than a decade, according to a leading real estate website.
According to Rightmove, the average reduction was 6.2%, the largest since January 2011.
Based on September’s average asking price of £366,281, this equates to a regular price reduction of £22,709.
The real estate portal said the figures suggest some sellers were too optimistic about their initial asking prices, resulting in larger-than-usual adjustments.
attached to the back Housing market downturn next 14 times in a row bank of england Interest rates rise to prevent soaring interest rates inflation.
This is a factor pushing up borrowing costs, including mortgage loans.
And then there’s the hiking, Probably the lastis expected this week.
A recent poll of 65 economists found that all but one expected central banks to raise money. rate to 5.5% on Thursday. 5.25%This is the highest level since 2007.
However, Rightmove said there were signs that activity in the housing market was starting to pick up, with the number of new properties coming onto the market jumping 12% in the first week of September compared to the average weekly number in August. Ta.
Rightmove’s Tim Bannister said: “A slower-than-usual August means all eyes will be on market activity over the next few weeks, which will set trends for the rest of the year.”
“While the combination of the 14th consecutive Bank of England interest rate rise and many buyers and sellers still making up for holidays lost to the pandemic has contributed to a stronger-than-expected summer lull, we remain We expect a recovery in the fall.”
Mr Bannister added: “Many sales have been agreed for appropriately priced properties and sales times are now five days faster than at this time in 2019.”
“As market conditions and mortgage rates stabilize, we are seeing a decline in the number of bankruptcies.”
Andy McHugo, director of McHugo Homes in Birmingham, said: “I feel this summer and last summer were the calmest summers I’ve had in almost 20 years of selling homes. I’m probably looking forward to traveling this summer. This is probably due to the impact of not being able to do so.” 2020 and his 2021, but obviously there’s also the current economic context.
“Encouragingly, since early September we have seen an increase in inquiries as more homeowners have shown a willingness to step onto the market, which should translate into sales in the coming weeks and months.”
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If the benchmark interest rate peaks this week at 5.5% from its starting point of 0.1%, it would rank among the largest so-called tightening cycles of the past 100 years, which occurred in the late 1980s. It’s just secondary to the surge. From the early to late 1970s.
All rapid interest rate increases to date have been accompanied by economic recession, and the central bank’s Monetary Policy Committee is becoming increasingly aware of economic recession, as the 14 interest rate hikes have not been fully reflected in the real economy. It will probably happen.
Data between now and Thursday’s release could influence the results, with August inflation data to be released on Wednesday likely to reverse the downward trend due to: increase in gasoline prices.
The inflation rate has been gradually declining since peaking at 11.1% in October last year. 6.8% in the year to July – It remains high.