Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
The UK property market is currently facing a period of uncertainty, with falling house prices and a high number of unsold homes. Policy direction and interest rates remain unclear, impacting market sentiment for letting agents and inventory clerks.
Nationwide has reported that property prices fell by 0.6% in May. Rightmove has also recorded the steepest June fall in asking prices in 14 years. According to the report, three in five homes remain unsold after six months on the market.
The article notes that there is little policy detail from PM-in-waiting Andy Burnham, though housing appears to be a high priority on his agenda. There is mention of a more interventionist approach and increased devolution of housing policy, as well as a stated intention to review tax reform. This could include replacing stamp duty and council tax with an annual property levy, which may affect homebuying affordability.
On the financial side, the Bank of England’s Monetary Policy Committee held the base rate at 3.75% in June, with a 7:2 split among members. Two members supported a rate increase to just below 4%. Inflation is currently at 2.8%, but the July energy cap and ongoing effects of the Middle East conflict could push inflation back towards 4% before the end of the year.
Market views suggest no change in the Bank base rate until next year, or possibly until late 2027, when rates could fall to a new norm of around 3%. Money market rates have seen slight decreases: 2-year and 3-year money are both at 3.94%, 5-year money at 3.99%, and 10-year money at 4.24%.
For letting agents and inventory clerks, these developments highlight ongoing challenges in the UK property market, with slow sales and policy uncertainty affecting both landlords and tenants.
Source: Mortgage Strategy