Housing market crash easing after U-turn of mini-budget

According to analysts, Jeremy Hunt's decision to rip up most of last month's mini-budget should strengthen the UK’s housing market crash which was beginning to sag and could alleviate some of the downward pressure on prices.

Future of the housing market

However, the new chancellor's intervention may not be enough to prevent significant falls in house prices. Even if new mortgages become temporarily cheaper, borrowers would still have to pay higher home loan payments in November, despite the sizeable interest rate hike expected.

The buyer demand in the two weeks after the 23 September mini-budget was down 15% year on year.

Responding to Monday’s moves, Chris Hodgkinson, of the property firm HBB Solutions, said: “The damage has already been done to homebuyer sentiment … Even if we do now see mortgage rates level out, many will be far too worried to proceed with a purchase in fear of another government U-turn further down the road.

Demand for homes softens

According to the latest Rightmove House Price Index, buyer demand remains 20% higher than 2019, but fell 15% year-on-year over the last two weeks. Demand from first-time buyers was down 21% in the same fortnight.

The property portal attributed the weakening to recent "rapid" mortgage rate rises, which had caused potential buyers to pause their plans.

The u-turn of mini-budget eased the housing market but the house prices continued to grow, rising 0.9% to a fresh high of £371,158, although that was below the five-year average rise for October of 1.2%. The number of homes seeing a reduction in asking price during the month rose to 3% from 2%.

Are you buying a new house in the current situation?

If you are considering buying a new house for the first time, it is suggested to do the appropriate searches and read the terms and conditions of a mortgage contract.

After deciding if you can afford to buy a new house you should also calculate how much to spend in additional costs such as:

• Survey fees
• Valuation fees
• Stamp Duty Land Tax if you’re buying in England and Northern Ireland
• Land Transaction Tax if you’re buying in Wales
• Land registry fee
• Local authority searches
• Fees, if any, charged by the mortgage lender or someone who arranges the mortgage, for example, a mortgage broker
• The buyer’s solicitor’s costs
• VAT
• Removal expenses
• Any final bills, for example, gas and electricity, from your present home which will have to be paid when you move.

You can find more information about:

• Stamp Duty Land Tax in England on GOV.UK
• Stamp Duty Land Tax in Northern Ireland on NI Direct
• Land Transaction Tax in Wales on the Welsh government website
   

The times are very unpredictable, and it is always best to consult with a solicitor before taking any decision.

Also, here at Online Land Registry we suggest checking the records of the property such as previous owners, title plans and any other information that would help you to decide if it meets your demands.

We offer title registers, title plans and many other documents for an affordable price, order yours now here and get your document within 24 hours.