According to property portal Rightmove the average price of property coming to market in the UK has risen to 0.9% but the demand from first-time buyers has dropped.
Despite the governments consistent U-turns and economic turmoil brought on by the mini budget, there has been little sign of the housing market slipping. Rightmove, has revealed that the average price of a house in the UK was £371,158 in October, which is only slightly below the average increase for the time of year.
Whilst the asking prices have risen higher in October, the demand for first-time buyers has dropped as the mortgage rates continue to rocket. Rightmove also revealed that first-time buyer demand was 21% lower in the last two weeks compared to 2021.
In a warning issued by Rightmove, they cautioned that the fallout of wider economic uncertainty could take time to filter through, with buyers rushing to complete to make the most of existing mortgage offers.
Whilst the vast majority of agreed sales were going ahead as planned, some buyers are accelerating the process to ensure they can still complete before the lower fixed-rate mortgages expire. Rightmove revealed that prices were reduced on 23% of houses on the market compared with 21% the previous month.
Mini Budget Mayhem
As a result of the mini budget, where the former chancellor Kwasi Kwarteng’s announcement spooked financial markets, around 1,000 mortgage deals were removed from sale by lenders last month.
Rightmove has predicted that asking prices will likely drop in November and December but there were more “more economic events to play out” before forecasting for the 2023 market can be done.
Some property analysts have predicted that this change in the market will soon decline, with Halifax reporting a slight decrease in sold prices in September, and surveyors RICS signaling the end of the 13-year house pricing boom next year.
What Does This Mean For The Housing Market?
Rightmove’s director, Tim Bannister, said: “What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially after the market uncertainty after the government’s mini-budget. There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues.
We spoke to Karl McArdle, Co-CEO of The Property Buying Company, about what he thinks this means for the housing market.
Mr McArdle told us “This news means that a lot of first-time buyers will have had their plans for home ownership snatched by the sudden nature of the mortgage rate rise. The rising mortgage rates paired with the rising rates of rent and the shortage of houses available means people will have a difficult decision to make.”
He went on to say, “It may take some time after this economic turmoil for the market to once again settle but stability will return.”