A realtor holds up ‘For Sale’ and ‘For Sale’ signs outside a house in the Maida Vale area of London, England, Thursday, 30 June 2022.
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Demand for UK residential property nearly halved following September’s government budget that rocked financial markets. beat the prime ministera study on Monday showed.
The financial package announced on 23 September sale of bonds led to predict The housing market could crash as interest rate expectations have risen sharply. Due to the budget A record number of mortgage deals were drawn And many lenders have paused their offerings to assess volatility.
Buyer demand fell 44% year-over-year in the four weeks to 20 November. according to Property website Zoopla saw a 28% drop in sales of new homes. The inventory of homes for sale he increased by 40% over the same period.
Zoopla said demand has fallen to levels typically seen at Christmas, when the real estate market is at its quietest. This is because buyers are waiting to assess their mortgage prospects, their jobs and their wages.
Zoopla’s executive director of research, Richard Donnell, said the company expects home prices to fall by up to 5% in 2023.
“However, due to a range of structural, demographic and economic factors, including ongoing housing shortages, sales numbers remain strong, with the average number of homes being offered per real estate agent higher than before the pandemic. One-fifth less,” he said. .
A fall in home prices is widely predicted, but the company’s projections are less bearish than others.
Economists at Pantheon Macroeconomics forecast an 8% decline over the next year, while Nationwide, one of the UK’s largest mortgage providers, said earlier this month House prices could fall by up to 30% in the worst case scenario.
By contrast, the UK Budget Responsibility Office said it expects house prices to fall 1.2% next year and 5.7% in 2024.
That’s after the appetite for different types of real estate during the pandemic, the moratorium on purchase taxes on homes under $500,000 from July 2020 to July 2021, and continued supply shortages have pushed home prices down. . Rocket records all-time high.
Zoopla said it is currently undergoing a “widespread” repricing of its homes, but on a modest scale. UK house prices grew 7.8% year-on-year.
The report described the market trend as a “shakeout, not a precursor to the housing crash” and said the minibudget “shocked” sellers and buyers.
“All of the key supply and demand indicators we have measured continue to point to a sharp slowdown from very strong market conditions, with UK house prices likely to see forced sell-offs in 2023 or a massive double-digit decline. We see no evidence that a reset would be necessary,” the report said.
Meanwhile, UK private rents hit a record high amid fierce competition for property, according to separate data released last month by website Rightmove.
Rents in London rose 16.1% year-on-year, the highest rate of growth ever recorded.