Asking prices for British homes dropped this month

homes in England

Compared with a year earlier, asking prices were up 0.4%

Asking prices for British homes coming to the market dropped this month, with signs that some buyers are waiting for the BoE to cut interest rates, a survey from property website Rightmove showed on Monday.

The company said the average asking price was £373,493 for property put on sale between June 9 and July 6, 0.4% less than a month earlier.

The Rightmove data, which is not seasonally adjusted, often falls in July, although this drop was bigger than usual.

Compared with a year earlier, asking prices were up 0.4%.

Other gauges of the housing market have shown slowing momentum, as expectations for an imminent BoE rate cut have increasingly been pushed back because of strong wage growth and stubborn cost pressures.

Investors on Friday assigned around 50% probability that the Bank of England will reduce rates on August 1, although wages and inflation data due later this week could tilt that in either direction.

Rightmove said the certainty provided by the July 4 election – which resulted in a landslide victory for Keir Starmer’s Labour Party – would probably prove positive for housing market sentiment.

But it described the potential for a cut in the Bank of England’s rate as a “game-changer”.

A first Base Rate cut for over four years, along with the new political certainty, could set the scene for a positive autumn market, with improved affordability and a more confident outlook in the second half of the year, according to Tim Bannister, director of property science at Rightmove.

Affordability was a hot political issue ahead of the election, as house prices have increased by nearly a fifth since the last election in December 2019.

The new Labour government has promised to ramp up house-building, with an emphasis on affordable housing.

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