UK property prices hit record low in February: Rightmove

The average asking price for residential property in the UK rose by just 14 pounds ($17) in February compared with January, the smallest increase in a month that typically sees seasonal increases. This is according to data from the real estate portal Rightmove.

Rightmove reported

that the minimal increase, effectively zero in percentage terms, suggests that property sellers are following the advice to price their homes realistically in order to sell in a slowing market. Tim Bannister, director of research at Rightmove, said prices usually rise at this time of year as the spring selling season begins. "The fact that the average price has remained largely unchanged indicates athe fact that many sellers are breaking tradition and showing moderation in introductory price," he said.

The monthly change - non-seasonally adjusted - was the smallest from January to February since Rightmove began recording the data in 2001. Compared to last year, the increase was 3.9%.

In the very beginning of February, mortgage lender Nationwide Building Society reported the longest fall in sale prices since the global financial crisis.

In November, analysts polled by Reuters predicted a 5 percent drop in prices this year, while analysts at Japan'sNomura Bank predicted a 15% fall by mid-2024.

Rightmove reported that demand in the market has started to recover since the start of 2022 following a sharp rise in mortgage interest rates caused by former Prime Minister Liz Trust's mini-budget. In the first two weeks of February, demand from buyers was up 11% compared to the same period in 2019. The number of sales agreements was 11% below pre-pandemic levels, while a sharp 30% drop was recorded in the immediate aftermath of the mini-budget.

British house prices have risen by more than a quarter since the COVID-19 pandemic began, following a trend in other developed economies of low interest rates and a desire for more space to live in during quarantine.

On Dec.2021 UK interest rates have risen sharply. The Bank of England raised interest rates from 3.5% to 4% this month to curb double-digit inflation, and markets expect the main rate to peak at 4.5% in June.

"The frenzied market of recent years was short-lived in the longer term and our key indicators now suggest the market is moving to a more normal level of activity after the turmoil of late last year," Bannister said.