UK property market stabilizes after ‘mini-budget’ rate hike, Rightmove survey shows

LONDON, March 20 (Reuters) – Britain’s median home-to-market price leveled off in March and activity is picking up towards more normal pre-pandemic levels after last year’s “mini-budget” flurry. , a poll showed on Monday.

Property portal Rightmove said home sales prices rose 0.8% a month in March after the weakest February on record dating back to 2001 when they stagnated.

However, this month’s growth was below March’s 20-year average monthly increase of 1.0%, and property sellers were more cautious than usual about prices.

Tim Bannister, director of property science at Rightmove, said higher mortgage rates and economic headwinds posed challenges, but the housing market appeared to be stabilizing faster than expected after its late-2022 hit.

While borrowing costs have come down from their peak, they are still nearly double their level before former Prime Minister Liz Truss’s unfunded tax cut plans, part of her “mini-budget” in September last year, which it caused confusion in the bond markets.

Rightmove’s survey showed that agreed sales in the first-time buyer segment were improving faster than larger homes that were in demand during the COVID-19 pandemic frenzy for more space.

Britain’s official budget forecasters, the Office for Budget Responsibility (OBR), said last week that house prices would fall 10% this year amid falling incomes and higher borrowing costs.

Households have faced double-digit inflation since September and the OBR said the country was still on track for a record drop in living standards for the two years up to March 2024.

The OBR also forecast that inflation would fall to 2.9% by the end of 2023. The Bank of England is considering if it raises interest rates again this week after 10 consecutive increases since the end of 2021 to try to get inflation back to its 2% target.

($1 = 0.8235 pounds)

Reporting by Suban Abdulla Editing by William Schomberg

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