Home News End of pandemic-era ‘race for space’ as demand for buying houses slumps

End of pandemic-era ‘race for space’ as demand for buying houses slumps

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Demand for buying a home is declining more sharply than for an apartment. Pandemic Era ‘Space Race’ Reversalbecause very high mortgage rates are hitting affordability.

According to real estate website Zoopla, the number of inquiries from prospective buyers has dropped 47% for homes since MiniBudget in September, compared with a 42% slump for apartments.

of The largest decline in housing demand was in the Southeasthas seen a 52% reduction in calls. Apartments fell 45%. London and the West Midlands also saw a significant drop in home sales inquiries.

the largest gap in Residential demand Apartments were in the Northeast, slump at 33% for housing and 11% for apartments.

Other data from analyst TwentyCi showed that consensus sales of homes this month were down 16.5 percent from the same period in 2019, compared to a 1.6 percent decline in apartments.

Mortgage rates surged following a market rebound against the September mini-budget. Prior to that, his five-year average was 4.75%, and on Oct. 20 he peaked at 6.51%, according to the analyst’s Moneyfacts.

Today, the average five-year fixed contract is fell down The steep rise in borrowing costs has severely limited the amount homeowners can offer, reducing demand for more expensive properties.

Average home prices are 35 percent higher than average flats, the widest gap since records began in 2005, according to consultancy Capital Economics.

A turning point in the real estate market. The market for flats, especially flats with no outdoor space, has slumped during the pandemic as housing with more space surged in popularity.

Single-family home prices have risen by more than a third (30.4 percent) over the past three years, while apartment prices rose just 13.6 percent over the same period, according to the think tank Center for Business and Economic Research. .

“Demand for flats is weaker than for single-family homes in the pandemic, and the decline in demand is not as great,” said Richard Donnell of Zoopra.

CEBR’s Karl Thompson said he expects house prices to fall more sharply than apartment prices in the coming months.

he said:

Mr Thompson added: “The sharp rise in borrowing costs and the return of workers to inner-city areas may be taking a particular toll on house prices now, and the market needs to fall further.”

Capital Economics’ Andrew Wishart said preferences for space “may soften a bit” as workers are increasingly expected to return to the office two or three days a week.

he said: “The cost of buying on a mortgage has risen significantly due to the steep rise in mortgage rates, so prospects determined to climb the ladder need to save space in order to be able to afford it.”

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