UK housing market showing signs of mortgage rates impact, Rightmove says
LONDON, Oct 19 (Reuters) - Asking prices for British homes rose in October but there were signs that rising mortgage rates caused by the war in Iran were starting to weigh on affordability and more resilient parts of the market, property website Rightmove said on Monday.
Prices for property put on sale during Rightmove's October period — which runs from September 13 to October 10 — were 1% higher than a month earlier, when they rose by 0.7%.
The survey is not seasonally adjusted and asking prices typically rise each October. This year, the rise was smaller than the 1.3% average for the month.
"It's an early sign that higher mortgage costs are putting pressure on affordability even in markets with lower property prices, affecting the areas and types of property that buyers can afford," Colleen Babcock, property expert at Rightmove, said.
The survey also showed:
Asking prices were 0.1% lower than a year earlier, after a 0.8% annual drop in September
The average two-year fixed mortgage interest rate rose to 5.55% from 5.29% in October, up sharply from 4.25% in February before the start of the Iran war
Buyers were uncertain ahead of finance minister John Healey's budget later this month, while some first-time buyers were waiting for more detail on the First Home Scheme
New sellers in more affordable and previously resilient parts of the UK were setting lower asking prices to offset affordability challenges
Sales agreed were 8% below their level a year earlier
The number of homes available for sale remained at its highest level for this time of year since 2014