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Agency says UK house prices were flat month-on-month in September

Quick Look

Data from Lloyds Bank of England showed that British house prices in September were flat month-on-month and unchanged year-on-year.
They fell slightly by 0.2% quarterly, which was lower than economists' expectations of a 0.1% month-on-month increase and a year-on-year increase of 0.2%.
High mortgage interest rates continue to suppress the housing market, but potential demand for home purchases has rebounded.

AI-generated summary

Why It Matters

The Bank of England has kept its benchmark interest rate unchanged since the end of February, but rising market financing costs and expectations of interest rate hikes have pushed up mortgage interest rates. In August, house prices fell year-on-year for the first time since 2023.

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China News Service, London, October 8 (Reporter Ouyang Kaiyu) Lloyds Bank of the United Kingdom released data on the 7th saying that British house prices remained unchanged month-on-month in September. In August, British house prices fell year-on-year for the first time since 2023, and this data performance was lower than market expectations.

Data show that housing prices in September were unchanged month-on-month and year-on-year. Quarterly housing prices fell slightly by 0.2%. High mortgage interest rates continued to put pressure on the property market. The head of Lloyds Bank's mortgage department analyzed that the current real estate market is in a state of gaming, and home buyers are cautious. However, there is still a rigid demand for home purchases in the market, and the number of potential mortgage inquiries has rebounded to the highest level since February this year.

Economists surveyed by Reuters had previously predicted that house prices would rise by 0.1% month-on-month and 0.2% year-on-year in September. The actual results were lower than expected. The Bank of England has kept its benchmark interest rate unchanged since the end of February, but due to rising market financing costs and expectations of interest rate hikes, mortgage interest rates have risen significantly.

Financial market calculations show that the probability of a 25 basis point interest rate hike by the Bank of England at its November interest rate meeting is over 90%, and investors predict that there will be three more interest rate hikes in 2027. However, earlier this year, similar interest rate hike predictions did not materialize. (over)

What to Watch

AI outlook — possibilities, not facts

The Bank of England will raise interest rates by 25 basis points at its November interest rate meeting
Very likely · Within weeks
Investors expect the Bank of England to raise interest rates three more times in 2027
Possible · Within years

Open Questions

Will the Bank of England raise interest rates by 25 basis points in November as expected?
Can the rebound in mortgage inquiry volume translate into actual transactions?
When will the property market stabilize under the continued high interest rate environment?