UK house prices have fallen, with average asking prices dropping by £5,366 (1.4%) in November to £366,592, according to Rightmove. This decline surpasses the typical 0.8% dip seen at this time of year, driven by concerns over the Autumn Budget and the traditional pre-Christmas slowdown.
Despite the drop, housing market activity is stronger than in 2023. Sales agreed are up by 26%, and new seller listings have risen by 6% compared to last year, reflecting improved sentiment fuelled by recent interest rate cuts.
The Bank of England lowered the base rate to 4.75% this month, marking its second cut this year. However, mortgage costs have increased slightly, with the average two-year fixed rate rising to 5.49% from 5.36% in October and the average five-year fix reaching 5.22%, up from 5.05%. These rates remain below their 2023 levels but have been affected by global economic uncertainties, including rising swap rates following the US presidential election and last month’s Budget.
Rightmove remains optimistic, forecasting a 4% rise in average asking prices for 2025. Lower mortgage rates are expected to ease pent-up demand, applying modest upward pressure to prices. While interest rates may not fall as quickly as previously anticipated, analysts predict a reduction to 3.5% by early 2026, offering hope for greater market stability.
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