UK Rightmove House Prices Sunday, September 17, 2006
Outlook: The Rightmove measure of UK house price growth could continue to decline in the month of September following August’s slip of 1.6%. Although last month’s figure was negative, the annual rate of house price expansion was still 9.0%, which could have been enough to temper demand even more. A reduction in the amount of potential buyers may also be exacerbated by the increase in interest rates in August by the Bank of England to 4.75%, as well as the potential for further hikes later in the year. On the other hand, a tighter labor market which has helped maintain wage growth, could have given purchasers more confidence in affordability, lending upside risk to the house price number.
Previous: House prices in the UK, as measure by Rightmove, declined 1.6% in August, which was the largest fall in nearly two years. Rightmove reported that the slowdown was partly due to seasonal factors, however, they also highlighted that they believe that prices had peaked for 2006. Adding to the already sky-high prices in the housing market was the BOE’s surprise 25 basis point hike on August 3rd to 4.75%. Potential home buyers were subsequently left with not only increased prices, but also rising borrowing costs, and likely kept some of them out of the market altogether.
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