UK housing market seen going through additional ‘mini-budget’ fallout By Reuters

By Suban Abdulla

LONDON (Reuters) – British property market exercise stalled in October and home value progress slowed to its lowest quarterly degree since February 2020 because of a disastrous “mini-budget” and a cost-of-living disaster, a survey launched on Monday confirmed.

Zoopla’s home value index mentioned the October slowdown was partly because of the financial plan set out in September by then prime minister Liz Truss, which triggered a sell-off in bond markets.

The spike in mortgage charges within the aftermath of the Truss plan led to a pointy decline in housing exercise that actual property group Zoopla mentioned was “extra pronounced in new purchaser demand than gross sales agreed”.

Purchaser demand fell 44% year-on-year in October, whereas gross sales volumes had been down 28% in comparison with a yr earlier, however on par with the pre-pandemic interval, Zoopla mentioned.

Zoopla mentioned it expects mortgage charges to return in direction of the 4-5% degree at first of 2023 after the price of 5-year fastened loans eased from a peak above 6% final month.

In annual phrases, home value inflation slowed to 7.8%, with quarterly progress at 0.7%, the bottom price since February 2020.

Zoopla predicts British home value progress to go in direction of 0% and probably enter damaging territory subsequent yr.

“Whereas the outlook for home costs is weak, we see a shift to extra wants pushed motivations to maneuver in 2023 and past which can assist gross sales volumes,” Richard Donnell, govt director at Zoopla mentioned.

A fast lease surge will add to price of residing pressures and add “continued impetus” to first-time purchaser demand, he added.

Regardless of the shocks, the slowdown within the property sector is a “shake-out” moderately than the beginning of a crash, Zoopla mentioned.

A separate survey revealed on Friday confirmed property demand has shifted from shopping for to renting amid monetary uncertainty.