Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

UK housing market seen facing further 'mini-budget' fallout

Economic Indicators Nov 28, 2022 00:10
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: Property estate agent sales and letting signs are seen outside an apartment building in Lichfield, Britain, May 3, 2022. REUTERS/Andrew Boyers/File Photo 2/2

By Suban Abdulla

LONDON (Reuters) - British property market activity stalled in October and house price growth slowed to its lowest quarterly level since February 2020 due to a disastrous "mini-budget" and a cost-of-living crisis, a survey released on Monday showed.

Zoopla's house price index said the October slowdown was in part due to the economic plan set out in September by then prime minister Liz Truss, which triggered a sell-off in bond markets.

The spike in mortgage rates in the aftermath of the Truss plan led to a sharp decline in housing activity that real estate group Zoopla said was "more pronounced in new buyer demand than sales agreed".

Buyer demand fell 44% year-on-year in October, while sales volumes were down 28% compared to a year earlier, but on par with the pre-pandemic period, Zoopla said.

Zoopla said it expects mortgage rates to return towards the 4-5% level at the start of 2023 after the cost of 5-year fixed loans eased from a peak above 6% last month.

In annual terms, house price inflation slowed to 7.8%, with quarterly growth at 0.7%, the lowest rate since February 2020.

Zoopla predicts British house price growth to head towards 0% and possibly enter negative territory next year.

"While the outlook for house prices is weak, we see a shift to more needs driven motivations to move in 2023 and beyond which will support sales volumes," Richard Donnell, executive director at Zoopla said.

A rapid rent surge will add to cost of living pressures and add "continued impetus" to first-time buyer demand, he added.

Despite the shocks, the slowdown in the property sector is a "shake-out" rather than the start of a crash, Zoopla said.

A separate survey published on Friday showed property demand has shifted from buying to renting amid financial uncertainty.

UK housing market seen facing further 'mini-budget' fallout
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email