Homebuyer demand down 15% after mini-budget: Rightmove
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, comments on Rightmove House Price Index, showing homebuyer demand down 15% after mini-budget.
Key points from publication:
- Buyer demand in the two weeks following the mini-budget was down 15% from the same two weeks a year earlier, according to
- The average asking price hit a new record of £371,158 in September – up 0.9% in a month, and 7.8% in a year.
- The number of properties seeing a price reduction rose 2 percentage points to 23%.
- The average agent has 50 properties on their books – up from a low point of 40 in January.
- The average time to secure a buyer is 37 days (51 in London) – up from 31 days in April.
- 1% of sales have fallen though since the mini-budget – in line with 3% in the same two weeks in 2019.
Sarah Coles says:
“The property market is the kind of momentum-driven super tanker that takes far more than a fortnight to execute a major manoeuvre. However, in the two weeks after the mini-budget, the propellers slowed significantly, and demand fell 15%.
“The market is looking less robust on a number of fronts as spiking mortgage rates push property out of the reach of desperate buyers.
“September saw a sea change in the mortgage market. Rates had been creeping up, but in the aftermath of the mini-budget they soared. We wouldn’t expect this to feed through into agreed sales for around a month, and completion figures for three or four months, because most of the sales agreed right now will have mortgages already secured.
“Even in September there were already some signs that the market was in less rude health than earlier in the year. Annual house price growth has continued to slow, with demand down from last year, the average number of properties on agents’ books up to 50, and small rises in a number of measures from the average time it takes to sell (up to 37 days), to the proportion of property prices being cut back (up very slightly to 23%).
“There has also been an awful lot of water under the bridge in the short time since the mini-budget, and the current Chancellor has unwound most of the tax breaks that bond investors were so worried about, so there’s a chance that mortgage rates could back off from some of the peaks we’ve seen recently.
“However, with the Bank of England warning of major rate hikes in November, it’s unlikely to be much of a reprieve.
“It all adds up to a risk that we could see significant house price falls over the next few months.
“It means anyone considering buying right now, needs to be absolutely certain they can afford their new home, and that they’ll be in it for long enough to ride out what’s likely to be a very difficult period.”
Kindly shared by Hargreaves Lansdown
Main article photo courtesy of Pixabay
