Quarter 1, traditionally a quiet time of the year plus bad weather, has been exactly that – London property asking prices slumped for a seventh straight month as sellers held off putting their homes on the market, according to property portal Rightmove. The March report from the home-listing website shows that asking prices declined 0.6% from a year earlier in March, with the number of newly marketed properties falling 3 percent. Prices rose 0.6% from February, a smaller-than-usual jump at the start of the spring season, it said. Nationally the picture was less dismal with asking prices increasing 1.5% in March from February, after “strong demand” from home movers in the first two months of the year. The average price of 304,504 pounds is up 2.1% year-on-year. That compares with gains of about 6% seen less than two years ago.
The Bank of England and Interest Rates
Sterling rose marginally, amidst the chances of a May rise in interest rates increasing sharply after two members of the Bank of England’s monetary policy committee voted for an immediate hike in borrowing costs. Sterling rose on foreign exchanges on news that Ian McCafferty and Michael Saunders had backed a quarter-point rise in the bank rate to 0.75%. While the other seven members of the MPC voted to leave rates unchanged, the tone of the minutes left the City convinced that an upward move was on the way.
Although the economy grew by a modest 0.4% in the final three months of 2017, the MPC said there was a chance activity in late 2017 would be revised higher and signalled concern about rising earnings growth.
“The unemployment rate remained low in the three months to January. The firming of shorter-term measures of wage growth in recent quarters and a range of survey indicators suggest pay growth will rise further in response to the tightening labour market,” the MPC said.