The late summer heat enjoyed by Britain’s property market is cooling fast.
In part the slowdown in price rises is a side-effect of the post-election surge in activity.
The rush of sellers putting their home on the market in early autumn means that many buyers now find themselves spoilt for choice and able to negotiate hard on the price they pay. When buyers hold the cards like this, price inflation tends to be kept in check.
But there are other more worrying factors at play too. Anxiety about what this week’s Budget might hold cooled activity sharply in October, especially at the top end of the market. Many of the estate agents we work with saw the number of viewings halve as buyers opted to wait and see.
And then there’s the mortgage market, which has veered off the script that many wrote for it after the Bank of England first cut its Base Rate in August. Even if the Bank does announce another rate reduction next week, many mortgage lenders are having to push up the rates they offer to new borrowers.
More expensive, rather than cheaper, mortgages will not ease the fragile sentiment.
The fallout from the Chancellor’s decision to impose higher Stamp Duty on anyone buying a second home or a buy-to-let property could now cool the market further. While pragmatists will reflect that the tax raid could have been worse, the market spent much of October in the brace position and not everyone is ready to come out of it yet.
Leave a Comment