The tail-end of summer is proving to be a challenging period for the UK housing market, with buyer confidence remaining low despite rate cuts by major central banks to combat cooling inflation.
Recent data from Rightmove indicates that the average home price fell by 1.9% in August, the sharpest decline for the month since 2018. During the latter part of summer, the average home price dropped by £7,012 to £364,000.
House building firms are also feeling the impact of rising interest rates. Crest Nicholson, for instance, revised its full-year profit before tax outlook from £73.7 million to around £50 million due to persistently high rates.
Upcoming Key Updates:
August 30th: Zoopla HPI
Zoopla's index will shed light on other estate agents' perspectives regarding the struggling property market. Analysts are eager to assess how higher interest rates and mortgage costs are affecting the housing market, consumer confidence, spending habits, and economic growth.
The Bank of England's money and credit division will release mortgage approval figures for July on the same day. Despite an increase in net mortgage approvals for house purchases in June, it remains uncertain whether this trend will continue given the recent rate hikes and higher mortgage rates.
Thursday, August 31: Grafton First-Half Results
Grafton, a prominent DIY, home, and garden retailer in Ireland and the UK, will reveal whether post-pandemic customers are still keen on home improvements. Analysts are particularly interested in CEO Eric Born's outlook and any potential changes in tone or guidance provided in the results statement.
Grafton's shares, which peaked in 2021 during the DIY boom and strong housing market conditions, have since dropped by around 40%. Despite this, no profit warnings have been issued under the leadership of CEO Eric Born, who took over in November. The company has also implemented a £50 million share buyback program, indicating ongoing confidence in its future prospects.
