Average UK house prices grew to another record high in October 2022 despite lower demand from first-time buyers as mortgage rates soar, according to the latest survey by Rightmove PLC (LSE:RMV).
The property marketplace said house prices climbed by 0.9% in the month - just below the average rise at this time of year - to £371,158 despite the economic turmoil since the UK government’s emergency mini-budget in September
There has been almost no sign of the housing market easing, Rightmove noted, adding that it expects the effects of economic uncertainty to take time to filter through as many buyers rush to complete home purchases on existing mortgage offers.
The latest Halifax survey, however, reported a slight decrease in homes sold prices in September, while a report from surveyors body RICS anticipated the end of the 13-year housing boom next year.
Rightmove pointed out that prices will likely decrease in November and December this year, in line with usual seasonal price changes, with “more economic events to play out” before 2023 forecasts can be made.
First-time buyer demand has sunk by 21% in the previous two weeks compared with 2021, according to Rightmove.
Tim Bannister, Rightmove director, commented that it would take time for the market to settle to normality after “two years of market frenzy”.
“Some aspiring first-time buyers will have had their plans dashed by the sudden nature of the mortgage rate rises and now face a difficult situation with rents also rising, and a shortage of available homes to rent," he added In the survey statement.
Most agreed sales had been going ahead as planned, the property marketplace said, with many buyers speeding up the process to ensure they could secure lower fixed-rate mortgage offers before expiration.
Rightmove noted that prices for homes on sale were 23% lower, compared with 21% lower for the month before.