UK house prices defy gloom with an average £3,000 rise
Average house prices have risen by nearly £3,000 this month as the property market continues to resist predictions that the UK’s lacklustre economic performance will cause a significant slump during 2023.
Despite low growth and historically high mortgage rates, which have prompted forecasts of a 10% fall in prices this year, the average home is on the market at £365,357 in March, a rise of 0.8% on the previous month.
The increase is below the typical March rise of 1% over the past 20 years but still reflects a market “on a much more stable footing than many anticipated”, according to property website Rightmove, which published the data.
Rightmove said the market was recovering from a spike in borrowing costs at the end of last year, when policies put forward by Liz Truss and her chancellor Kwasi Kwarteng spooked international investors and sent mortgage costs soaring.
Average rates for a five-year fixed deal with a 15% deposit soared to 5.89% in October, shortly after Kwarteng’s doomed “mini-budget”, prompting estate agent Savills to predict a 10% slump in prices during 2023, amid the wider economic malaise.
The rate for the same mortgage deal has since fallen back to 4.65%.
Although this is still well above the 2.48% seen this time last year, estate agent Knight Frank said borrowing costs could fall further, as lenders compete to win business in a less buoyant market.
Central banks have also been tipped to think twice about raising base rates, given turmoil in the banking sector after the collapse of Silicon Valley Bank and the crisis engulfing Credit Suisse.
Inflation has also edged down to 10.1% from a peak of 11.1%, also registered in October last year, while recent economic figures have shown the UKnarrowly averting a
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