Housing Market Resists Economic Headwinds

A Resilient Second-Step Market 

Hello there,

We are back again with EO’s monthly market update. This time prepared at the end of the month to be able to comment on the latest data possible. September has seen multiple major events that have impacted all of the UK, but last week was especially prevalent for the housing market.

In the same week, the Bank of England raised the Base Rate, meaning higher mortgage repayments once the change is reflected by lenders, and a new mini-budget has made significant and permanent stamp duty changes.

How has the market reacted?

 In the face of national uncertainty, the housing market has remained surprisingly resilient. Annual house price growth sits at 8.7%, which is higher than in our last market report, even though this rate was forecast to continue decreasing towards the end of the year. Looking at it from a monthly viewpoint, the average asking price increased by +0.7% over September.

Buyer demand also endures, despite rising mortgage rates, being up 20% compared to the pre-pandemic 5-year average.

The average asking price of properties now sits at £367, 760.

Is this the same for all properties?

The continuous increase in asking price is being driven by ‘second-stepper’ properties. This includes 3 bed properties, and undetached 4 beds.

For fist time buyers, the stamp duty changes mean that 2/3 of all homes in England are exempt from stamp duty.

However, these changes were implemented recently and are in effect permanently, so its impact on the market is expected to kick in gradually rather than leading to a spike in demand.

For now, the sector of properties suitable for first time buyers, is down 8% compared to the same time last year.

This makes considering average monthly repayments for a first-time buyer is currently £1057 which is 40% of an average gross salary. This has not been the case since November 2012. The recent spike in interest rates, when implemented by vendors, could mean this average monthly cost rises to £1,114.

As always, if you would like to discuss your property plans with us, you can find our details here.

Kind regards,

Luiz De Souza | Administrator