Suspicion that the Bank of England could raise interest rates may have pricked the UK’s housing bubble, as prices seemed to be stalling in August, at least in London. Hometrack puts the growth in prices for August at just 0.1 percent, which is the same as in July. Summer slowdowns are not uncommon, but it reports that the reluctance stems in part from concern over the chances of a rate increase.
Hometrack reports that nearly 1 percent fewer new buyers registered with real estate agents, and that the number of weeks the average property spends on the market has risen to 6.3 weeks, up from 5.9 weeks in June. Prices in London are underperforming relative to the rest of England and Wales.
“Whilst average house prices are yet to fall, weaker demand and increasing supply over the last six months have reduced the upward pressure on house prices,” writes Housetrack. “This is increasing the amount of time properties are spending on the market and resulting in sellers having to accept larger discounts to the asking price to achieve a sale. All evidence of a shift towards a seller’s market in the remainder of the year.”
