According to the real estate website Rightmove, asking prices for British houses increased in May 2023 more than in any other month due to a more positive economic outlook and stable mortgage rates that somewhat offset the effects of the Bank of England’s interest rate increases.
According to Rightmove, on average, residences went up by 1.8%, or 6,647 Pounds (USD 8,389.18), from April to May 2023. This increase was more than the 1.0% increase that was typical for May.
The pessimistic market predictions made at the beginning of 2023 are beginning to look increasingly implausible, according to Tim Bannister, director of property science at Rightmove.
Sector researchers predicted earlier in 2023 that British home prices could decline by as much as 15% by the middle of 2024. However, since then, the economy has shown to be more resilient than anticipated, avoiding recessionary predictions thus far.
Although borrowing rates have decreased from their highest following Liz Truss’ disastrous “mini-budget” in September 2022, they are still higher than before the autumn market turbulence.
According to Rightmove, mortgage rates have remained consistent from week to week.
Early this month, the BoE raised the Bank Rate by a quarter point to 4.5% to assist control inflation, which reached 10.1% in March 2023.
According to Rightmove, buyer demand in May 2019 was 3% more than in May 2019, before the coronavirus epidemic distorted the market.
Other indications have shown a more contradictory picture.
Halifax, a mortgage provider, reported earlier this month that in April 2023, the annual growth rate of home prices slowed to its lowest level in over a decade. However, rival Nationwide said that after declining for the previous seven months, prices rose by 0.5% every month in April.
Over 1.6 million British homeowners, according to estimates from the think tank Resolution Foundation, will see an average increase in their fixed-rate mortgage bill of 2,300 Pounds over 2023 and 2024 as those deals mature.
Talking about the economy, the European nation is still dealing with the economic headwinds, as per Capital Economics, which also stated that April 2023’s public finances figures have got the new fiscal year off to “a shaky start”.
“After one month of the 2023/24 fiscal year, the Chancellor is already on track to overshoot the OBR’s full-year borrowing forecast of £132 billion (5.1% of GDP) by about £3.2 billion”, says Ruth Gregory, their deputy chief UK economist, while interacting with the Guardian.
Also, the UK national debt was almost as large as the country’s annual economic output.
Public sector net debt at the end of April 2023 was £2,536.9 billion or around 99.2% of gross domestic product (GDP).
The current debt-to-GDP ratio is at levels last seen in the early 1960s.
Grocery price inflation has fallen for the second month in a row, but is still adding an extra £833 to the average consumer’s annual bill.
Prices over the four weeks to May 14 were 17.2% higher than a year ago, down from April’s 17.3%, data firm Kantar reported, apart from pointing out that price rises were still being ‘incredibly high’, with the current ratio of 17.2% being the third fastest rate of grocery inflation reported since 2008.
Fraser McKevitt, head of retail and consumer insight at Kantar’s Worldpanel Division, said, “This could add an extra £833 to the average household’s annual grocery bill if consumers don’t shop in different ways.”
While the average cost of four pints of milk has come down since April 2023, it still remained higher than the same month in 2022 at £1.60.