House prices increase in the face of rising living costs and interests. - Nova
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According to the latest data from Rightmove new property listings for the month of September are at 0.7% higher prices than August, averaging at £367,760

House sellers have continued to raise their asking prices despite borrowers facing higher interest rates and the cost-of-living squeeze, data from property portal Rightmove shows.

The report from the online property agency shows that, despite increased cost of living and the recent growth of the Bank of England base rate, sellers are continuing to increase their asking prices.

The increase was, on average, £2,587 per property coming to market. Month on month this means that the average price is now £367,760, or an 0.7% increase.

Most of the price growth was focussed on the upper 2 quartiles of the market, as homeowners look to increase the size of their properties, with the ‘second stepper’ category hitting a record asking price average.

The housing expert for Rightmove, Tim Bannister, stated that the market remains “surprisingly resilient” even with the changing economic pressures.

There has been a raft of new changes announced by the government and Bank of England, and Bannister has highlighted that this could cause “unseasonal price increases over the next few months. This is especially true if there is a jump in buyers and a reduction in sales.

“The first-time buyer threshold change means we could see more first-time buyers,” he said.

The two major changes are the changes in the stamp duty announces last week, and the increase in interest rates. With no tax to be paid up to the value of £250,000 and the first-time buyer limit 0% rate stamp duty limit increased to £425,000 there is looking to be a boost in the lower end of the property market in the short term.

However, with the base interest rate now at 2.25% the cost of financing will come into some effect. This means that the average first time buyers mortgage cost will have increased from £1,057 to £1,114, if lenders pass on the new increase.

This could be even more important for those who are looking to purchase their first properties in more expensive parts of the country, such as London, however it could also increase the demand for these properties, creating a further increase in prices.

Richard Davies, MD of estate agent Chestertons, said “If this added demand isn’t met swiftly, the proposed tax cut could boost the existing imbalance of supply and demand, which consequently leads to an initial spike in property prices,”

One change which may curb this however is the changes in how much borrowing is available to new purchasers. As interest rates continue to rise affordability checks will become stricter, and therefore those on lower incomes may struggle to borrow enough to purchase their first property.

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