The number of homes sold in September fell by nearly 40%. Covid stamp duty holidaysexperts suggest the real ‘home sale horror story’ is yet to come.
Across the UK, 103,930 transactions were recorded in September. This is a 37% decrease from the same month in 2021, but about the same as in August, as HM Revenue and Customs Commission (HMRC) figures show.
The number of completed deals has remained stable in recent months, according to the report, with overall numbers still higher than before the pandemic. Long-term borrowing costs underpinning loan transactions have risen.
Mortgages had already risen after this year’s Bank of England rate hike.However, about 1,700 transactions were not covered by mini-budgets (then big reversal by the new Prime Minister, Jeremy Hunt, this week). New mortgage products are much more expensive.
Average two-year fixed mortgage costs hit 6.55% on Friday, the highest since the financial crisis in 2008, and five-year contracts averaged 6.43%, according to data firm Moneyfacts.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdowne, said September’s numbers have suffered compared to a year ago when the stamp duty holiday was flooded with deal completions. “The real horror stories of home sales will unfold in the coming months,” she said.
The sale, which was completed in September, roughly coincided with around June when demand began to decline slightly as higher prices persuaded some to reconsider, Coles said. During that time, the average two-year fixed interest rate was 3.61% at the time, so monthly payments “still felt within the affordable range” for so many buyers.
“The turmoil unleashed by the mini-budget has pushed mortgages out of reach for so many buyers that an agreed sale in the coming weeks is likely to be much uglier.” Coles said. The fixed rate for 2019 is almost 3 percentage points higher than the June figure.
“We expect this to reflect today’s heightened fears in the numbers by the end of this year and beginning of 2023.”
Some homebuyers who have already taken out a mortgage are rushing to buy, while others choose to wait to see what happens to mortgage rates and home prices in the coming months. Some people
Jason Tebb, CEO of real estate search website OntheMarket.com, said the company’s data showed sentiment remained positive in September, with nearly 80% of sellers expected to return in the next three months. We are confident that we will be able to sell to
“We will see how upcoming political events and the appointment of another prime minister affect the sentiment of buyers and sellers,” he said. “As interest rates and the cost of living continue to rise, buyers have less purchasing power, so new properties hitting the market must be priced realistically.”
https://www.theguardian.com/business/2022/oct/21/uk-housing-sales-fall-but-real-horror-story-yet-to-come UK home sales fall, but the real ‘horror story’ is yet to come | The housing market