Potential homeowners are now putting their home-buying plans on hold as rising interest rates push mortgage rates closer to a record 6%.
According to Rightmove, the number of people inquiring about rental properties is up 23% compared to this time last year, but the total number of movers in the market looking to rent or buy is down just 1%. increase.
In addition, 4 in 10 (42%) of first-time buyers who plan to make a purchase in the next few years say they have already accumulated a full deposit and are waiting for greater financial certainty. says. An additional 43% are saving.
“There are signs Mortgage rates and availability are starting to settle After two tumultuous months, it shows that next year could be even lower,” said Rightmove.
But with competition among tenants reaching record levels this year, agencies say they are handling an average of 36 inquiries per property, and the strained rental market is already seeing this shift. I’m applying pressure.
The number of small rental properties available, including studios, one- and two-bed units, decreased by 4% compared to last year, but the sales market increased by 13%.
Real estate firms say first-time buyers have been hit hardest by rising mortgage rates, and some of this group now see the rental market as a short-term option.
However, with 4% fewer small rental homes on the market than last year, options are limited.
“There are signs that mortgage rates are settling in, but there are indicators that they will stabilize at higher levels than previous buyers were used to,” said Tim Bannister, real estate expert at Rightmove. .
“If someone is saving up and ready to move out, it’s been a few weeks now, especially as there are more options on the market and some sellers are pricing more competitively for Christmas. You may find that it offers a better opportunity than
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A recent fall budget guarantees stamp duty savings until early 2025.
The minimum amount at which homebuyers start paying stamp duty has been confirmed to remain between £125,000 and £250,000, saving movers up to £2,500.
First-time buyers can also get additional relief at the stamp duty starting price set at £425,000, as long as the overall property value is under £625,000. The threshold before first-time buyers started paying stamp duty was £300,000.
“Since the start of the pandemic, the number of tenants looking for property has outstripped the number of available rental properties,” said Amadeep Lal, head of leasing at Manning Stainton. This means that there is a very limited number of viewings that can be reserved, making it very competitive among tenants to secure viewings and properties.
“If prospective tenants can share as much information as possible at the beginning of the process, it will go a long way in helping them find a place to live more quickly, putting them at the front of the queue for properties that become available.”