UK house prices have continued to hit record highs this month, but there are growing signs of a slowdown out there as mortgage costs soar
UK house prices have continued to hit record highs this month.
But there have been growing signs of a slowdown out there as mortgage costs soared.
The common cost of a British home rose 0.9 per cent to £371,158 during October, a 7.8 per cent increase year-on-year, property website Rightmove said.
Trouble ahead: Rightmove noted buyer demand had fallen by 15 per cent during the last two weeks in comparison with the identical period a yr ago
However the market gave the impression to be cooling, with the 0.9 per cent rise slower than the typical 1.2 per cent increase for the month during the last five years.
More buyers were also deciding to delay their plans as sharp rate of interest hikes and the market turmoil unleashed by then-chancellor Kwasi Kwarteng’s mini-Budget caused a surge in the fee of recent mortgages.
Rightmove noted buyer demand had fallen by 15 per cent during the last two weeks in comparison with the identical period a yr ago, even though it was still 20 per cent higher than pre-pandemic levels. The sharpest decline got here from first-time buyers – those hardest hit by rising mortgage costs – with demand dropping 21 per cent year-on-year.
‘Some aspiring first-time buyers may have had their plans dashed by the sudden nature of the mortgage rate rises, and now face a difficult situation with rents also rising, and a shortage of obtainable homes to rent,’ said Tim Bannister, Rightmove’s director of property science.
However the sudden surge in mortgage costs was failing to slam the brakes on transactions, with the info showing only 3.1pc of agreed sales had fallen through within the two weeks following the mini-Budget, according to 2019 levels. Rightmove also highlighted that many buyers were ‘rushing to finish’ house purchases before their lower fixed-rate mortgage offers expired.
Those out there also noted price strength was continuing despite the recent bout of volatility attributable to the low variety of homes going up on the market.
‘Demand continues to be outstripping supply in the intervening time, so so long as properties are priced accurately, activity levels are still strong,’ said Matt Powell, branch manager at estate agent Royston and Lund.
House prices boomed through the pandemic as stamp duty cuts introduced by then-chancellor Rishi Sunak caused demand to soar.
But there are growing fears the fee of living squeeze, coupled with climbing rates of interest, will cause prices to fall and mortgage bills to leap.
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