Housing market returns early from summer slowdown

Asking prices on the property website Rightmove this month have risen for the first September for three years

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The housing market is returning from its summer lull earlier than usual, according to new figures that show asking prices are rising.

However, there are continued signs of a North-South divide, with rents in Scotland, in particular, falling even as the United Kingdom as a whole saw an increase.

Asking prices on the property website Rightmove this month have risen for the first September for three years, despite fears of an imminent interest rate rise from the Bank of the England and the recent introduction of tougher mortgage lending rules.

The housing market traditionally suffers a drop in activity over the summer, with asking prices this year dropping 0.8 per cent and 2.9 per cent in  July and August, respectively.

But prices in England and Wales gained 0.9 per cent, or an average of £2,474, this month – the first gain at this time of year since September 2011 and bucking the average for the month over the past decade of a 0.5 per cent  decline.

Rightmove also said it had recorded four million enquiries in August – its second-highest total ever for a single month, behind January this year.

Across England and Wales, East Anglia saw the biggest rise in asking prices this month – with a 3.7 per cent jump, taking the average to £249,860 – while the South-East came in second place with an increase of 2 per cent, leaving its average at £348,214.

Rightmove sounded a warning over the upcoming Scottish referendum, saying that while the data suggests “the market is poised for a resumption of strong activity … some analysts are forecasting a return to a less certain economic outlook should there be a vote for Scottish independence.”

Meanwhile, residential rents in Scotland fell last month. The latest report from the tenant referencing firm HomeLet shows that the average monthly cost of renting a property north of the border was £624 in August, 1.9 per cent lower than in July.

The average cost of renting a home in the UK as a whole was £921, almost 50 per cent more than north of the border. The average UK rental price jumped by 2.3 per cent in August, according to HomeLet.

There have been reports of a fall in the number of house purchase transactions in Scotland ahead of Thursday’s referendum, with buyers holding off until the result is known. Some people are also said to be making offers “subject to referendum” amid fears that a Yes vote would have a negative effect on house prices.

Another concern is that Scottish mortgages could be denominated in a new currency, pushing up repayment costs, if Scotland is unable to continue using the pound.