UK home buyers "not too frightened" amid election, lofty rates

(Alliance News) - UK house prices snapped at the heels of May's record high this month, despite robust mortgage rates and the threat of election uncertainty.

Rightmove said the average UK house asking price was largely flat on-month at GBP375,110 in June, compared to May's record high of GBP375,131.

On-year, house prices grew 0.6% in June, the same pace of growth in May.

Rightmove noted lofty mortgage rates are hurting affordability. The average five-year fixed mortgage rate is now at 5.04%, compared with 4.94% in January, it noted.

Would-be movers have the Bank of England's interest rate outlook, as well as the upcoming general election and any housing market promises to be mindful of. The BoE's next decision is on Thursday. The election is on July 4.

Rightmove analyst Tim Bannister commented: "It's always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady. This election has followed a similar pattern so far, and the responses from our poll of over 14,000 people also supports the data, with the vast majority of respondents saying they will carry on with their home-moving plans."

Rightmove's Bannister said it seems to be "business as usual for the mass-market".

In the wake of the data, MT Finance analyst Tomer Aboody is seeing "some caution but overall confidence within the market".

"Buyers are not too frightened of what might come," Aboody added.

"As mortgage rates seem to be holding firm, some buyers are still waiting for a change, with indications looking like a reduction will be coming. With a Labour government likely, there are some fears of untold taxes which could affect the market. Help is needed within the property market, but will Labour listen and act?"

By Eric Cunha, Alliance News news editor

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