UK house sales at pre-COVID levels after ‘mini-budget’ shock

By Suban Abdulla

LONDON (Reuters) – British homes sales recovered to within a whisker of pre-pandemic levels in March, representing a recovery from September when the failed economic plan of former prime minister Liz Truss sparked turmoil across markets, a survey showed on Wednesday.

Property website Rightmove (OTC:) said the number of sales agreed between sellers and buyers was just 1% lower last month than in March 2019 as borrowing costs edged down from their leap after the September ‘mini-budget’.

“The market is remaining surprisingly robust given the economic headwinds that have affected movers over the last six months,” Rightmove’s property expert Tim Bannister said.

However, while the total number of agreed sales had improved from being 21% below 2019 levels as recently as January, they remained down 18% when compared with March 2022.

As well as Britain’s high inflation rate, the country’s housing market is facing the challenge posed by the Bank of England’s run of interest rate increases going to back to December 2021.

Real estate agents noted a “significant upswing” in buyer demand for apartments of all sizes, with agreed sales rising 10% from 2019, up from a fall of 11% at the start of 2023.

London saw the most pronounced recovery in the broader market, with overall agreed sales increasing 11% compared to March 2019, and agreed sales of apartments 23% higher.

Robert Sturges, central London area director at estate agents Chestertons, said demand for apartments was being driven by commuters looking to move closer to their work and overseas buyers taking advantage of favourable currency exchange rates.

“In the face of rising living costs, some buyers may also decide that a flat is financially more viable than a house at this moment in time,” Sturges added.

Rightmove said a third of properties were reduced from their original asking price, up from 19% last year although in line with pre-pandemic levels.

The average size of price reduction rose to 6%, or 22,000 pounds ($27,341.60) based on the current national average asking price of 365,357 pounds, according to Rightmove.

Mortgage lender Nationwide has previously said its measure of house prices fell 3.1% in the 12 months to March – the biggest annual drop since July 2009 – while rival Halifax reported a 1.6% year-on-year rise.

($1 = 0.8046 pounds)