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Analysts positive despite largest fall in house prices in 14 years

Average house prices have seen their sharpest drop since 2008 according to the latest Halifax House Price Index.

The index shows that the average house price fell by 2.3% in November to £285,579, which was the third consecutive fall and the largest since October 2008.

The report also showed that the annual rate of growth fell in November from 8.2% to 4.7% with growth slowing in every UK region bar the North-East.

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And with the Bank of England hiking interest rates from 2.25% to 3% triggering a low number of mortgage approvals, Rightmove has reported a drop of 21% in the number of first-time buyers in the last two weeks of October 21 compared with the same period in 2021.

Although some analysts have been predicting a crash in the UK housing market of as much as 20%, others are more optimistic.

Halifax Mortgages director Kim Kinnaird said: “When thinking about the future for house prices, it is important to remember the context of the last few years, when we witnessed some of the biggest house price increases the market has ever seen. Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020).

“The market may now be going through a process of normalisation. While some important factors like the limited supply of properties for sale will remain, the trajectory of mortgage rates, the robustness of household finances in the face of the rising cost of living, and how the economy – and more specifically the labour market – performs will be key in determining house prices changes in 2023.”

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Meanwhile, experts at Cornerstone Tax are forecasting a rise between 5% and 8% as foreign investment, driven by the decline in the value of sterling, making the housing market 10% cheaper.

Cornerstone Tax chairman David Hannah was adamant: “There will be NO crash and NO 10-20% fall in property prices that we saw in the Noughties. The UK property market has tended to be more stable than any other global market in property.”

He added: “We have faced a massive set of instabilities. We’ve had two years of the pandemic, necessary pandemic spending, we’ve had the war in Ukraine and that has increased inflation which has led to a massive increase in interest rates. Recent government policy in the UK has led to a devaluation in sterling and at least one if not two regime changes in the conservative party, and all of these factors have added to a sense of uncertainty of what’s going to happen in 2023.

“In early 2023, we will see slow demand. Only those people that are forced to sell will see a small fall in prices, however, over the whole of 2023, I expect to see low to mid to single-digit growth over the UK property market – between 5% and 8%. Despite the negative headlines we have been seeing, there is an underlying pressure on the market and that is leading to upward pressure on prices.”

Hannah concluded: “We now have a growing number of people that want to move to the UK. The first is the overseas investor who regards UK property as a safe haven for their money because the country they principally live in is not economically or politically safe. The second are those who want to become second homeowners. The third and final group is those who want to leave their country of birth and are in need of a home. All of these factors over the course of the next 12 months, I believe, are what will support the UK market and leave it with a modest and steady rate of growth.

By Chris Frankland

Source: KBB Review

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Positive outlook for housing market as buyer sentiment improves

Despite the increased uncertainty of recent months, the latest survey from Savills shows that buyer commitment has improved since the firm’s previous survey in August, when it hit its lowest point since the start of the pandemic (April 2020).

This latest survey, undertaken this month, points clearly to the buyer groups most likely to be active in 2023: needs-based buyers in the early part of the year and increasingly the equity-rich lifestyle ‘right-size’ buyers as the year progresses.

Of those who gave a reason for moving, 41% were downsizing, 36% upsizing, while 23% were in the market because of a relationship breakdown or a bereavement, to reduce borrowing or because a change in employment necessitated a move.

Asked about their commitment to move, a net balance of +3% of all respondents said they were more committed to moving within the next three months and +12% over the next six months.

This rises to +20% for those moving for work, +32% for those moving because of a bereavement and +39% for those looking to reduce levels of borrowing. The most committed group, with a net balance of +48%, are moving because of a relationship breakdown.

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These needs-based buyers express the greatest urgency to move within the first half of 2023. By contrast, levels of commitment to moving amongst those looking to ‘right-size’ their homes, whether upsizers or downsizers, rise significantly over the next year or two.

Frances McDonald, Savills residential research analyst, said: “A return to a more stable political and financial environment following the tumultuous ‘mini-budget’ has led to a more positive outlook among potential buyers and sellers, despite the expectation of further economic uncertainty.

“While there are very clear headwinds, this survey suggests that there is a strong seam of demand in the market, but that it will be clearly split between those who need to move quickly and more discretionary buyers equally committed to moving but happy to bide their time over the next 12-24 months, to ensure that they get the right home at the right price.”

Some 77% of Savills agents agree that there has been a marked increase in the number of buyers coming through their doors looking to take advantage of expected lower house prices next year. Savills has forecast average falls of -6.5% across the UK prime regional markets next year, but a net +10% increase over the next five years, pointing to an opportunity for those less reliant on borrowing.

More debt-dependent first time buyers and mortgaged buy-to-let buyers are more likely to find themselves less able to transact until affordability improves, particularly until there is more certainty in the lending market, Savills says.

“The legacy of the pandemic – where buyers were driven by lifestyle choices and the birth of the ‘race for space’ phenomenon – is now permanently ingrained in the UK buyer’s psyche and expected to continue to shape choices in 2023,” continued McDonald.

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A vast majority (93%) of Savills agents agree that the value of home life is now more important than ever for their buyers. This is translating into buyers taking a longer-term view when searching for the perfect home. Fewer than one in 10 (9.7%) of buyers anticipate owning their next home for less than five years, while 60% expect to own for at least 10 years. A quarter (25%) of aspiring buyers are currently looking for their ‘forever’ home, with a 20+ year timeframe in mind.

Despite a return to offices and normal social routine, country living also remains popular. When asked what type of location is most attractive, the majority of aspiring buyers opted for small towns, villages and the countryside, over cities and their suburbs.

Agents also agree (58%) that somewhere to work from home is still a key priority for buyers.

“Buyers are also continuing to prioritise proximity to parks and open spaces, and family, above transport, amenities and schools,” added McDonald. “Only in London has proximity to the nearest train or tube station overtaken parks and open spaces, with proximity to family in fourth place behind shops and amenities.”

By Marc Da Silva

Source: Property Industry Eye

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Last month 72% of estate agent outlets ‘made most sales below asking price’

Almost three quarters of estate agents had most of their property sales in November agreed below the asking price, according to research from a body representing the industry.

The report from NAEA Propertymark, a membership organisation for estate agents, said 72% of branches made a majority of their sales last month below the level the client was seeking. This compares to a low of 15% in March, and a pre-pandemic average of 78%.

In further evidence that the housing market has slowed sharply, the report said competition had dropped by more than a third, from a high of 11 new buyers to every new property instructed in a member branch, to only seven.

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This is in stark contrast to the booming market seen as recently as the summer, when buyers were caught in bidding wars.

The number of new buyers registering per member branch dropped again to 52 in November, down from a high of 86 in August. The average number of viewings per property continued to fall, to 2.6. New instructions were down on average to eight per member branch, while the average number of properties available to buy per branch rose slightly to 33 – compared with a pre-pandemic average for November of 38.

The average number of sales agreed per branch dropped to six in November, from 10 in September.

There was some good news for renters, who have seen rents soar to record levels, according to the website Rightmove. The number of agents reporting higher rents fell below 50% for the first time since February 2021, to 49% from a high of 82% in July, Propertymark said. The remaining 51% said rents fell or were unchanged month on month.

A shortage of rentals has pushed up the amount tenants are forced to pay in recent months but in November the number of available properties to rent rose slightly, to an average of 11 per branch from nine the month before. Competition among tenants also lessened: an average of 77 new applicants were registered per member branch compared with September’s high of 147, although this is still above the pre-pandemic average.

The number of tenants has swelled as some would-be buyers are renting in the hope that mortgage rates will fall in the new year, while more people are living alone with the rise of working from home.

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Nathan Emerson, the chief executive of Propertymark, said: “The sales market is firmly back in the hands of buyers who have been on the back foot for 18 months. More property is available but the competition between those looking has cooled substantially. For those motivated to sell, good, solid buyers are still prominent.

“As for lettings, we are starting to see a decrease in demand; the knock-on effect is that fewer agents are seeing rent rises. It’s possible that prices have peaked, and landlords are well aware that any more rises won’t necessarily be achieved. This is not all good news, however, as landlords’ costs are still rising, leaving many facing a very real possibility of making a loss.”

By Julia Kollewe

Source: The Guardian

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Buyer confidence remains despite October uncertainty

Despite political and economic uncertainty in October, 74% of active buyers in the UK were confident that they would purchase a property within the next three months, the latest OnTheMarket property sentiment index finds.

Buyer determination in October filtered through to sellers, with 82% confident that they would sell their home within the next three months, up from 79% in September.

Meanwhile, 60% of properties were sold subject to contract (SSTC) within 30 days of first being advertised for sale, compared with 56% in October last year.

OnTheMarket chief executive Jason Tebb says: “This increase in the volume of new properties going under offer within the first month of marketing may suggest an urgency among buyers with mortgage agreements secured some time ago, who may be keen to proceed before those offers expire.”

“This is understandable as many of these rates will be significantly lower than current mortgage rates, which shot up following swap rate volatility after the mini-budget.”

“This could be helping focus buyers’ minds and encourage them to put pressure on their conveyancers to get deals done before the expiry date.”

The data also found that the national average increase in seller sentiment masks some significant regional swings.

In the East Midlands, sellers that were confident that they would sell their properties in the next three months went up by eight percentage points last month while in the South West and Wales both saw a seven percentage point rise in confidence.

However, in the North East, there was a one percentage point drop in seller confidence compared with September.

Tebb comments: “It seems astonishing that despite macroeconomic headwinds, and predictions from many estate agents that property prices will fall next year, serious sellers and buyers alike remain keen to proceed.”

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The index shows that only 5% of movers were concerned about securing a mortgage to fund the purchase of their next property last month, a slight increase compared to the 4% in September.

Of those in Greater London, 36% of respondents already had their mortgage agreement in principle in place prior to starting their search for a property.

The South West had the lowest number of respondents with 20% having a mortgage agreement in principle in place before starting their property search.

Elsewhere, 24% of movers hadn’t considered applying for a mortgage before starting their property search, with buyers in Greater London the least likely to have considered applying for a mortgage before starting their search for a property.

Just under half, 41%, said they didn’t need a mortgage in order to purchase a property.

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Greater London had the lowest number of respondents who indicated that they wouldn’t require a mortgage to purchase a property at 24% while Scotland had the highest number at 53%.

Tebb explains: “Some stability has returned to the market with the appointment of Rishi Sunak as prime minister and the reversal of many of the mini-budget measures. However, mortgage rates remain significantly higher than they were this time last year – the days of sub-1 per cent fixed-rate mortgages are long gone.”

“Challenges remain and the coming months are likely to be tough as the Bank of England raises rates further in an effort to bring inflation down. Encouragingly, however, the forecast for where rates might peak has fallen as some of the market turmoil has dissipated. Rock-bottom interest rates aren’t normal or sustainable and the new norm, which is slowly starting to establish itself, is beginning to look a lot like the old one.”

By Becky Bellamy

Source: Mortgage Finance Gazette

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Overseas buyers look to snap up London property as weak pound takes demand to ‘new levels’

Demand in London property from foreign investors is at “new levels” as they rush to make the most of the weaker pound.

The pound steadied in early trading in Asian markets on Tuesday, recovering ground slightly from the record low of 1.0327 against the dollar on Monday morning.

Sterling was standing at around $1.08 early on Tuesday but this is still significantly lower than before chancellor Kwasi Kwarteng’s mini-Budget, which sent the currency spiralling last Friday.

One London estate agent, Chestertons, has said that the dip in the value of the pound has driven interest from overseas buyers, who can now get more with their dollars.

“London already attracted overseas buyers back to its property market since the easing of travel restrictions but the weaker pound is taking demand from foreign investors to new levels,” Matthew Thompson, head of sales at Chestertons, said.

“Bearing in mind the dollar’s beneficial exchange rate against the pound, our branches have registered a particular boost in buyer enquiries from US citizens or residents of country’s where the dollar is a primary currency.”

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He continued: “To maximise the saving that can be had due to current exchange rates, buyers are especially drawn to some of London’s priciest neighbourhoods such as Knightsbridge, Mayfair and South Kensington.

“Only 6 months ago, a property that is on the market for £4million, would have cost around $5.23million. At the current exchange rate, the same property costs around $4.32million which is a saving of almost $1million.”

Rory Penn, head of London sales at Knight Frank, said that there has been “a pick up from international buyers who see a buying opportunity in London.”

“US buyers are either looking for best-in-class turnkey residential development or family houses and apartments,” he said, “particularly lateral space with high ceilings and period features.”

Arthur Lintell, who works in Knight Frank’s Notting Hill office, said that the North London residential area had seen particular interest from US buyers.

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“Favoured amongst Americans, Notting Hill has seen a recent surge in interest from US or dollar pegged buyers all keen to take advantage of the recent buying window,” he said.

“One in particular, an ex-Notting Hill local who relocated to New York 15 years ago, is now returning, as the opportunity is too good not to miss as their children start Notting Hill Prep next year. In their words: ‘The timing could not be better for us right now’.”

Naeem Aslam, chief market analyst at AvaTrade, said: “Given the weakness of the British pound, we may see foreign investors buying property in the UK as the currency has depreciated that much. For many, this could be a once in a lifetime opportunity.”

In an attempt to steady the markets on Monday, the Bank of England said that it “will not hesitate” to raise interest rates. However the pound fell after the joint statements from the Bank and its governor Andrew Bailey amid concerns that they had ruled out an emergency rise in rates.

The next interest rate decision is scheduled for 3 November.

Following the fall in the pound, some mortgage deals have been withdrawn by banks and building societies. Virgin Money and Skipton Building Society halted offers for new clients and Halifax said it would stop mortgages with product fees.

By Holly Bancroft

Source: The Independent

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House price growth slows to 9.8% in September

Home price growth slowed to 9.8% making the average property worth £373,427 in England and Wales over the past year, according to Acadata data from e.surv.

This monthly rise in September was 0.8%, compared to 1.1% in August, which also turned in an annual rise of 12.4%.

All 110 of the unitary authorities in England and Wales saw prices rise over the past year, ranging from a 25.5% jump in Devon, to 1.7% rises in Windsor and Maidenhead, the report says.

It was only in London that 10 boroughs saw prices fall over the same period. Overall, in the capital, average price movements ranged from a 19.2% lift in Enfield, to a 27.2% fall in the City of London.

However, the survey points out that although average house prices eased to 9.8% in September, this was still the second highest annual growth rate in twelve months, with this August, at 12.4% posting the biggest rise.

It says: “The data for September’s housing market is still showing that we were in ‘the calm before the storm’, and what we now know — following the mini-Budget on 23 September — highlights the lag between the data and the new reality.”

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E.surv director Richard Sexton adds that the current data was gathered before “the new Chancellor’s intervention, which has significantly disrupted the supply of mortgage finance.

“The upward repricing in the funding and derivatives markets has fed through to a rise in all rates but particularly fixed-rate loans that account for 80% of mortgage lending. “The housing market may be driven by sentiment, but we should remember that desirable residential property is still in short supply, which will support prices.

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“We continue to enjoy full employment, and we do not know yet what further fiscal rabbits the Chancellor will pull out of his hat in his November statement [now brought forward to 31 October] to relieve the pressure on mortgage pricing.

“A watching brief has shown time and again that the UK housing market has proven remarkably resilient over recent months, and it may yet weather this particular storm too.”

By Roger Baird

Source: Mortgage Finance Gazette

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Fixed mortgage rates continue to climb above 6% as choice of products improves

Average fixed mortgage rates are continuing to climb, pushing up costs for borrowers.

Earlier this week, the average two-year fixed-rate deal topped 6% for the first time in 14 years and the average five-year fixed rate hit 6% for the first time in 12 years, according to data from Moneyfacts.co.uk.

Moneyfacts said on Friday that, across all deposit sizes, the average two-year fixed-rate mortgage on the market is 6.16%, having edged up from 6.11% on Thursday and 6.07% on Wednesday.

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The average five-year fixed-rate mortgage is now 6.07%, having been 6.02% on Thursday and 5.97% on Wednesday.

Many deals disappeared from the market amid the fallout from the recent mini-budget. Bank of England base rate hikes in recent months, amid soaring inflation, have also had an impact.

Moneyfacts previously calculated that, based on Thursday’s rates, someone with a £200,000 mortgage, paying it back over 25 years could end up paying around £5,000 per year more for a two-year fixed-rate deal than they would have done last December.

Across the market, the choice of mortgage products is gradually increasing after contracting sharply last week.

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Moneyfacts counted 2,533 products on Friday, up from 2,430 on Thursday.

The total is still significantly down from 3,961 on the day of the mini-budget.

Tom Bill, head of UK residential research at Knight Frank, said: “We may see mortgage rates fall to some extent if financial markets become more reassured by the Government’s economic plan, but the events of the last fortnight have been a reminder that the era of ultra-low rates is coming to an end.”

Source: The Impartial Reporter

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UK house prices expected to fall as mortgage rates soar

Increasing mortgage costs and the wider cost of living crisis will place downward pressure on UK home prices over the next few months, according to Halifax.

The latest property price data from the mortgage lender reveals that the average price of a home fell by 0.1% in September.

Halifax said market activity had cooled in recent month, with a further slowdown widely expected in the coming months as rising borrowing costs make buying a property

“The housing market may have already entered a more sustained period of slower growth,” said Kim Kinnaird, the director at Halifax Mortgages. “The prospect of interest rates continuing to rise sharply amid the cost-of-living squeeze, plus the impact in recent weeks of higher mortgage borrowing costs on affordability, are likely to exert more significant downward pressure on house prices in the months ahead.”

Last week, the average five-year fixed-rate mortgage breached 6% for the first time in 12 years, while the average two-year fixed rate has passed the mark for the first time since 2008.

About 1,000 deals have been pulled from the market in recent weeks after Kwasi Kwarteng’s mini-budget triggered a sell-off in financial markets and raised expectations for even higher interest rates.

Halifax said a typical UK property now costs £293,835 as the pace of annual growth slowed for the third month in row, from 11.4% in August to 9.9% in September, the first time it has dropped into single digits since January.

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Industry reaction:

Tom Bill, head of UK residential research at Knight Frank, commented “It’s a fairly safe bet that UK house prices have now peaked. The impact of rising mortgage rates will begin to hit demand and spending power in coming months, which we believe will lead to a fall of 10% over the next two years for UK prices.

“We may see mortgage rates fall to some extent if financial markets become more reassured by the government’s economic plan but the events of the last fortnight have been a reminder that the era of ultra-low rates is coming to an end.”

Matthew Thompson, head of Sales at Chestertons, said: “The expectation that London’s property prices could see an adjustment has led to an uplift in buyer demand across the capital last month.

“Compared to August, there were 17% more buyer enquiries in September and 18% more viewings. We are also encountering an increasing number of house hunters who want to secure a property as soon as possible and take out a fixed rate mortgage. This has contributed to September’s property market remaining busy and competitive.

“As the cost-of-living crisis is looming, some buyers are compromising on their priorities in order to secure a property under their initial budget.”

Emma Cox, MD of Real Estate at Shawbrook, commented: “High inflation and a surge in interest rates has created a challenging backdrop for prospective house buyers.

“While the introduction of a stamp duty cut on properties up to value of £250,000 may offer a glimmer of hope for people currently in the process of purchasing a property, many will be waiting to see which way the wind turns before committing to buy.

“Against an uncertain political and economic backdrop, house prices are likely to continue to be affected, at least in the short term. More needs to be done to alleviate cost of living concerns and restore consumer confidence, on top of solving long-term supply issues.

“With many still reliant on the private rental sector, its vital that landlords are supported and encouraged to provide quality, safe and sustainable properties.”

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Iain McKenzie, CEO of The Guild of Property Professionals, said: “Homebuyers are still coming to terms with the sudden leap in fixed-rate mortgages, and it will be some time before we see the full impact.

“Many prospective buyers are rushing purchases through before their approved deal runs out, while others are seeing their hopes of buying fade before their eyes.

“The cooling in house prices seen in these figures is caused by the wider cost-of-living crisis, with energy bills at all-time highs, and inflation hurting many households.

“While getting a good mortgage deal has become significantly harder, a crash in the market is not as likely as some economists are forecasting.

“Estate agents are still seeing stock shortages in many areas of the country, something which has supported elevated house prices throughout the boom.

“The government’s new stamp duty changes will be enticing to first-time buyers on the surface, however, being able to take advantage of the change will largely depend on whether they can secure a mortgage deal.”

Phil Tennant, COO of iBuyer UPSTIX, said: “An under-discussed aspect of a possible housing market downturn is the fact that yet more property chains will collapse. One in five property chains already collapse, and this will only increase for reasons of mortgage unaffordability, shifting valuations, or simply cost of living calculations.

“In this context, those currently engaged in the sales or purchase process would do well to expedite things where they can. While the market hasn’t currently shown signs of a major dip, given all the market noises you’d expect sellers to face increasing difficulties in closing deals especially given that many buyers may be finding it harder to obtain a mortgage.”

Nicky Stevenson, Managing Director at national estate agent group Fine & Country, commented: “September’s data shows house price growth cooling slightly even before the Chancellor’s mini-budget speech which came towards the end of the month.

“Looking ahead, many buyers are now in a holding pattern as they wait for the dust to settle following the shockwaves felt by the mortgage market.

“As the pound has dipped, uncertainty over how high the Bank of England’s base rate might eventually go has caused heightened volatility, with many lenders withdrawing loan deals as they reassess affordability criteria and stress tests.

“This is a frustrating time for buyers as they wait for conditions to normalise and confidence to return to the market.

“Sterling’s weakness, however, does provide a window of opportunity for foreign investors.

“In higher value market areas like London, significant savings can now be made compared with the start of the year and we are already seeing a spike in interest from overseas.”

Jason Tebb, CEO of OnTheMarket.com, said: “With average house prices decreasing slightly in September compared with August and the annual rate of growth continuing to ease, the inevitable rebalancing of the market is evident as rising inflation, interest rates and the prospect of higher energy bills make an impact.

“As more stock becomes available it’s leading to a levelling off in pricing, although this picture is not consistent across the regions with some, such as the West Midlands and the South West, seeing significantly higher house price inflation than others.

“As the rising cost of living and mortgage rates prey on buyers’ minds when making offers, new properties coming to market which are not priced realistically will struggle to sell.”

By MARC DA SILVA

Source: Property Industry Eye

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31% of properties put on the market get an offer within one hour

Nearly one in five properties newly put on the market received an offer within one hour of a viewing, with one in 14 buyers making an offer on a house without even visiting it, according to data from the past five years. And the trend has accelerated as in 2022, 31% of properties now receive an offer in an hour compared to 7% in 2018.

Properties receiving an offer in a day is up over the same period from 26% in 2018, to 48% in 2022. One in eight (12%) properties have received an offer without a viewing this year, up from 7% in 2018. MPowered Mortgages, the fintech mortgage lender, has launched the inaugural House Pace Index to shed light on buying behaviour, which is motivated by market conditions, government intervention on the housing market plus consumer behaviour of wanting to “buy now”.

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The study found 38% of properties that have been put on the market in the past five years received an offer within the same day of a viewing. Only 14% secured an offer after a second viewing.

This trend is most prevalent in London with more than a third (37%) of properties receiving an offer on the same day as a viewing. One in seven (14%) homes in the Capital secured an offer without the buyer seeing the property in question.

Furthermore, 18-34 year olds are most likely to adopt this approach to house buying with 11% admitting to making an offer before seeing a property, compared to just 5% of 35 – 54 year olds. The average age of a first time buyer is 34 in the UK, suggesting that being quick to act could be down to inexperience coupled with fewer mortgage deals on the market.

Buyers see an average of three properties before making a first offer and 40% of buyers view only two properties before deciding they have found the right home for them. Despite buyers being quick off the mark, making a speedy offer is not always rewarded. Half (50%) of buyers have an offer fall through. The top reasons why an offer fails are that the seller received a higher offer (32%), problems appeared on the survey (25%) or there was a break in the chain (15%).

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The study also found that 10% of offers fell through as the buyer couldn’t secure a mortgage. More than half (51%) of sellers also reported they insisted on any first time buyers having a mortgage in principle before accepting an offer.

Stuart Cheetham, CEO, MPowered Mortgages, said: “We are seeing lots of activity in the market as buyers race to lock in deals given the pace in which they are rising in the current climate and this data shows that offers are being made extremely quickly, despite a large proportion of these falling through. Our House Pace Index shines a light on changing consumer behaviour against a backdrop of rising mortgage rates and aims to prompt more consideration in the house buying process.

“The race to find a home can be a daunting prospect even more so now in an environment where mortgage rates are rising as part of the cost of living. Of the many hurdles a homebuyer faces, one element that can be largely controlled is the certainty of their mortgage and this will be even more important as rates continue to rise.”

By Neil Shaw

Source: Coventry Telegraph

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Stamp duty cut set to boost property market as analyst ‘highly sceptical’ of demand-side push

Cuts to stamp duty are set to give the UK property market a boost of more than 25 per cent as thousands of Brits look to cash in.

Research from Barrows and Forrester suggests – based on previous stamp duty holidays – that up to a million homes could be sold due to the cut.

While many home-buyers will benefit, one analyst branded the move “tired, recycled thinking” from the government, saying industry figures remain “highly sceptical” about demand-side moves.

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Stamp duty was cut last week in Kwasi Kwarteng’s mini-budget in a bid to boost growth, as millions of households across the UK prepare for what is expected to be a tough winter with high energy and food prices.

In figures released this week, Barrows and Forrester said 923,498 homes were sold in 15 months prior to the last holiday, more than 60,000 a month, and this climbed to 1,167,600 when the holiday was in place, or 77,840 a month.

It is suggested there could be at least a 26 per cent increase in the number of home sales as stamp duty is eased, with the south east set to benefit the most.

During the previous stamp duty cut, in London, property sales were boosted by 35 per cent while in the south east, it was 36 per cent.

“Many of us within the property industry remain highly sceptical about government initiatives that focus solely on fuelling the furnace of demand while doing very little to address the issue of supply”, danaging director of Barrows and Forrester, James Forrester, said.

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“The latest stamp duty changes are just more of the same tired, recycled thinking by the government”.

“Despite the long term impact these cuts will have on topline housing affordability, there’s no doubt they will act as a tantalising carrot to current homebuyers, tempting them back to the market after initial signs that the pandemic property market boom was starting to ease.”

“We’ve already seen what a stamp duty saving can do in terms of boosting market activity and so we can expect to see more of the same, albeit at a perhaps less frantic pace as there is no expiry date on the tin, as it were.”

By JACK MENDEL

Source: CITY A.M.