What’s going on here?
Asking prices for UK homes dipped slightly this month, with buyers holding out for potential Bank of England interest rate cuts and bolstered by newfound political stability following the July 4 election.
What does this mean?
Recent data from Rightmove shows an average asking price of £373,493 ($484,943) for homes listed between June 9 to July 6, reflecting a 0.4% drop from the previous month. This decline, while typical for July, is larger than usual and points to a cautious market. As the BoE navigates strong wage growth and cost pressures, the likelihood of a rate cut hangs in balance, currently at a 50% chance. Meanwhile, the Labour Party’s election win brings political stability that could positively impact market sentiment and affordability through the autumn, with pledged increases in house-building and a focus on affordable homes.
Why should I care?
For markets: Shifting conditions on the radar.
House prices have surged by around 20% since the last general election in December 2019, and the recent dip signals potential shifts. Investors and market watchers should keep an eye on upcoming wage and inflation data, which could sway the probability of a BoE rate cut and impact autumn’s housing market dynamics.
The bigger picture: A new dawn for UK housing.
Keir Starmer’s Labour victory is set to influence the UK housing market through renewed stability and ambitious housing policies. The new government’s plans to boost house-building, particularly affordable housing, aim to address the affordability issues that have been a significant political topic, potentially reshaping the market landscape in the coming years.
