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UK housing market shows strains from “mini-budget”: Rightmove
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LONDON (Reuters) – Britain’s housing market lost momentum this month after Prime Minister Liz Truss’s economic plans upset financial markets and triggered a repricing of the mortgage market, data from property website Rightmove showed on Monday.
LONDON (Reuters) – Britain’s housing market lost momentum this month after Prime Minister Liz Truss’s economic plans upset financial markets and triggered a repricing of the mortgage market, data from property website Rightmove showed on Monday.
Asking prices for homes coming to the market rose by 7.8% year-on-year in October, the smallest increase since January.
Britain’s housing market had already been showing signs of cooling after a more than 20% surge in prices since the start of the pandemic as the cost of living rose and the Bank of England steadily increased interest rates.
But last month Truss’s government announced a plan to boost economic growth through unfunded tax cuts that alarmed financial markets.
The turmoil meant some institutions temporarily stopped selling mortgages to new customers, while others ramped up repayment rates for new loans.
Rightmove said the first-time buyer category had been hit hardest by the uncertainty.
“Buyer demand was already starting to soften and higher interest rates were anticipated, but they’ve been brought forward sharply due to market uncertainties,” Tim Bannister, Rightmove director of property science, said.
Rightmove reported a rush of buyers trying to complete sales before mortgage offers fixed at prior lower repayment rates expired.
Bannister said would-be buyers faced tricky decisions now.
“It’s understandable that some new movers who have the option to wait may want a clearer view than they’re getting right now before they proceed with a major purchase such as a home,” he said.
Rightmove’s index of asking prices, which is not seasonally adjusted, typically falls in November and December.
(Reporting by Andy Bruce; Editing by William Schomberg)
The housing market refers to the supply and demand for residential properties, including buying, selling, and renting homes. It is influenced by economic factors such as interest rates and consumer confidence.
Interest rates are the cost of borrowing money, typically expressed as a percentage. They influence how much borrowers pay on loans, including mortgages, and can affect housing market dynamics.
A mortgage is a loan specifically used to purchase real estate, where the property itself serves as collateral. Borrowers repay the loan amount plus interest over a specified period.
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