House prices fall by £4,000 as buyers fear ‘surprises’ in upcoming Budget
First-time buyers have been hardest hit by mortgage rate increases
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Your support makes all the difference.Asking prices for homes have dropped by more than £4,000 as buyers fears “surprises” in the government’s Autumn Budget.
Property website Rightmove said asking prices for homes dropped 1.1 per cent - £4,159 - month-on-month between 9 October to 5 November.
Liz Truss’s September growth plan triggered a steep rise in mortgage costs that accelerated the UK’s property market slowdown, with increases hitting first-time buyers hardest, Rightmove said.
The decline - despite the “weight of financial uncertainty” - was in line with the average fall recorded in November during the pre-pandemic years of 2015-2019, it said.
Average two and five-year fixed-rate mortgages surpassed 6 per cent in October for the first time since the global financial crash in 2008, according to data from the website Moneyfacts.
Rates have since eased back after the announcement of Rishi Sunak as prime minister calmed financial markets.
Chancellor Jeremy Hunt is expected to announce spending cuts and tax increases to repair Britain’s public finances and restore its credibility among investors.
“We're now in another state of limbo as we wait for any surprises or help in Jeremy Hunt’s Autumn Statement on Thursday,” Tim Bannister, director of property science at Rightmove said.
“The frenzied market of the past two years has turned into a more normal market more abruptly and less smoothly than we were expecting.”
First-time buyer homes continued to be the most affected category, with demand down by 26 per cent compared with a year earlier but still up 7 per cent on the same period in 2019.
“The first-time buyer sector saw the biggest increase in activity during the market frenzy of the past two years, but is now facing the biggest challenges after the sudden jump in mortgage interest rates,” Rightmove said.
“Though many are getting on with moves, especially those with a purchase already agreed, understandably there are people who are pausing for thought,”
Rightmove’s figures were released as estate and letting agent Hamptons said the average rent on a newly let home in Britain rose to £1,204 per month in October, passing the £1,200 mark for the first time.
Average monthly rents initially passed the £1,000 milestone back in June 2019, before dipping during the coronavirus pandemic and re-passing that point again in August 2020, Hamptons said.
In London, average rents passed £2,100 per month for the first time in October 2022, driven by prices in inner London, it added.
In annual terms, property prices were up 7.2 per cent in November, slowing from a rise of 7.8 per cent the month before.
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