Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Bank of England agents report 'softening' housing market ahead of rate decision
Feedback from the Bank of England's network of agents indicates that the UK housing market is softening, with property transactions down on last year and market sentiment subdued. The agents' summary of business conditions will be considered by the Bank's Monetary Policy Committee (MPC) before it sets the Bank Rate this week.
"The property market has softened further. Sentiment continues to deteriorate with a range of headwinds holding back both demand and supply," the agents' summary of business conditions says.
Subdued market, prices under pressure
Estate agents continued to report a subdued market, with house prices under more pressure in London and the South East and barely rising elsewhere. Transaction numbers are down on last year, in some areas by double digit percentages, and sales are taking longer to complete.
Weak demand in the new build sector
The report adds that demand in the new build market is similarly weak, with higher mortgage rates weighing on affordability. House builders are reliant on bulk sales and incentives to support cash flow, and there is no expectation of an imminent pickup in supply of new homes.
What happens next
The MPC announces its latest decision on Thursday, with the Bank Rate expected to be held at 3.75%, although some members are in favour of a rise. Last month, the Bank held interest rates, but three members of the nine-strong MPC voted for an increase.
For letting agents and inventory clerks, the reported softening in sales activity and longer completion times may shape the pace of instructions and handovers in the months ahead.
Source: The Negotiator