Signs that soaring mortgage rates are now biting harder
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The average price of a newly listed home rises by 1.0% this month (+£3,575) to £371,015. However, prices are virtually flat compared with a year ago (-0.1%) showing that the market remains very price-sensitive
There are signs that soaring mortgage rates are now biting harder, with new sellers in more affordable and previously resilient parts of Great Britain setting lower asking prices as buyers face mounting affordability pressures:
The average two-year fixed mortgage rate has risen to 5.55%, from 5.29% last month and 4.25% before the war in Iran started, adding around £250 a month to the cost of a typical new mortgage since February
New sellers in four of the five lowest-priced parts of Great Britain have set lower asking prices this month, including falls of 2.0% in the North East and 1.9% in Scotland
London asking prices rise by 2.5% this month, clawing back some of the 6.0% fall over the summer. However, prices remain 1.7% below last year, and wider data indicators suggest that this month’s rise is not evidence of a broader recovery
The number of sales agreed is down 8% on the same period a year ago, however this is broadly in line with the year to date, with deals still being done and sales activity showing surprising resilience despite higher mortgage rates
The Budget is adding a layer of uncertainty to decision-making. Some first-time buyers may be waiting for more detail on the Your First Home scheme, while others will be assessing what any announcements could mean for their wider household finances
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