UK house prices up 0.8% in March

UK property asking prices rose by 0.8% in March from the prior month and showed signs of stabilising after last year's ‘mini-budget’ that created severe market volatility, according to a survey released on Monday.

Online real estate agent Rightmove said the market still faced challenges from higher interest rates and economic headwinds.

Optimism about a recovery was tempered by the fact that March’s growth was below the 1% average monthly increase for the month over the last 20 years with sellers more cautious than usual about pricing.

Rightmove director Tim Bannister said the pace of the market reached an “unsustainable level in the last two years, and was on track to slow to a more normal level, though the speed of this slowdown to more normality was accelerated by the reaction to September’s mini-budget”.

Borrowing costs are still nearly double their level before former prime minister Liz Truss's plan for £44bn in unfunded tax cuts which led to chaos on bond markets, forcing the Bank of England to intervene.

Rightmove said sales agreed in the first-time buyer segment were improving faster than larger homes which were in demand during the Covid-19 pandemic frenzy for more space.

“While higher mortgage rates and economic headwinds raise challenges, many potential home movers who were effectively side-lined in the frenetic bidding wars of the last two years will find that a slower-paced market gives them time to plan and secure their next move as we enter the traditionally busy spring-buying season,” Bannister said.

Reporting by Frank Prenesti for Sharecast.com