The Monetary Policy Committee (MPC) was split on its decision, with three members voting for a rise.
After a difficult summer, the property market has been given another reprieve. The MPC’s decision to continue with their ‘wait and see’ approach provides a measure of stability for a very price-sensitive market – but this is unlikely to continue for much longer.
“Another hold, another split committee – and the question everyone’s asking is how much longer this stance can hold,” said Oliver Prior, Managing Director of Auction House. “It’s been a bruising summer for confidence, with oil pushing past $100 a barrel and inflation climbing to 3.1%, all while the market holds its breath for the October Budget. Unsurprisingly, that backdrop has left the property market subdued for months.”
A rate rise is looking increasingly hard to avoid, especially with the US Federal Reserve raising rates on 16th September, its first increase since 2023, and the European Central Bank moving too. That leaves the Bank of England as the only major central bank to hold steady this week.
Nevertheless, Oliver maintains that there are some chinks of light within this gloomy outlook.
“There are still signs of optimism – July’s surprise 0.4% growth is proof the economy still has some fight in it.
“It remains a buyer’s market and price sensitive, but auction is proving to be the refuge for sellers who have become disenchanted with the challenging private treaty market. Yes, the Essential Information Group’s (EIG) figures show sales down 2.6% year-on-year in July, but the 12-month results tell a different story – lots offered and sold were up 11.7% and 10.1% respectively.
“We’ve seen reasons to be positive ourselves. In the year to August, lots offered rose by 23.4% from the same period last year, while sales increased by 10.1%.”
Although there is uncertainty surrounding the Autumn Budget, and longer term concern about the future of base rate, Oliver believes it will be possible to foster some positive activity: “Summer slowdowns are par for the course. As we move into the traditionally busier autumn months, this latest hold should give the market the stability it needs to build momentum and start delivering stronger results.”
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