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House price growth slows as buyers wait for budget

Alex Kerr, UK economist at Capital Economics, said the “weaker-than-expected [data] suggests that the recent falls in mortgage rates may be providing less support to demand and house prices” than many had assumed. … Kerr agreed that “there is scope for mortgage rates to rebound and provide even less support over the next few months”, although he thinks any retreat in prices will be short-lived. As it stands, the consensus is that the Bank of England will cut interest rates from 5 per cent today to a low 4 per cent, but Kerr believes the Bank will go further and lower rates to 3 per cent by 2026. That, he thinks, will help to push house prices up by 5 per cent next year.

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