UK house prices rise for first time since May

British property sellers have increased their asking prices for the first time since May, according to property website Rightmove, in a sign of modest improvement in the UK housing market.

Rightmove said asking prices for homes put up for sale rose by 0.7% between August 9 and September 12. The increase was slightly higher than the average seasonal rise for the period and followed a 2.0% decline recorded in the previous four weeks.

Despite the monthly increase, property asking prices remained below their level a year earlier.

Rightmove said prices were 0.8% lower than a year ago, an improvement from the 1.0% annual decline recorded in its August report.

The property website also reported that the number of homes available for purchase had reached a 12-year high, giving buyers more properties to choose from.

However, demand remained relatively weak, with buyer enquiries 9% lower than at the same time last year.

Rightmove property expert Colleen Babcock described the September increase as a positive sign after a subdued summer, but cautioned that the recovery remained limited.

“September’s above-average price rise is a welcome sign of confidence after a particularly subdued summer, but it should be viewed as a modest recovery,” Babcock said.

Mortgage costs also remained a challenge for prospective buyers.

Rightmove said the average interest rate on a two-year fixed mortgage had risen to 5.29%, from 5.09%. Higher borrowing costs have continued to weigh on the housing market.

The increase in mortgage rates comes amid wider economic pressures linked to the ongoing Iran war, which has pushed up borrowing costs, according to Rightmove.

The latest figures suggest that while sellers have regained some confidence in September, the UK housing market continues to face weak buyer demand, elevated mortgage costs and a high level of available properties.

The combination of increased housing supply and subdued enquiries could continue to limit how quickly property prices recover, even as asking prices show signs of stabilising after their summer decline.

(Reuters)