“Demand from potential buyers has fallen 44% since the mini-budget, and sales by 28%, returning to their pre-pandemic level,” notes the real estate classifieds site Zoopla in a study published Monday.
The "mini-budget" presented on September 23 by Kwasi Kwarteng, who was chancellor of Liz Truss before being replaced in the emergency by Jeremy Hunt, had set the markets on fire because of massive measures to support energy prices combined with all-out tax cuts, unquantified or financed.
Long-term British government borrowing rates had soared, dragging mortgage rates in their wake.
In addition, the Bank of England continued to tighten its key rate in early November, also contributing to a surge in mortgage rates.
The latter soared to more than 6% in early October, before falling a little since Jeremy Hunt canceled almost the entire Kwasi Kwarteng plan.
Zoopla expects mortgage rates to be around 5% in early 2023.
The "for sale" sign of a real estate agency in front of a house in Lees, near Oldham, in the north of England on November 2, 2022 Oli SCARFF AFP
The year-on-year rise in sales prices for homes in the UK slowed to 7.8%, the lowest rate of increase in a year, according to the Zoopla study.
Experts on the specialized site, and more generally those in the sector, expect a contraction in stone prices next year, especially since the UK economy is already in recession, according to Jeremy Hunt and the UK Budget Office OBR.
The Bank of England also predicts a recession next year in the country, as does the OECD.
"The housing market is moving from a situation where demand and prices are showing unsustainable long-term strength to a more balanced market, despite financing difficulties for buyers who depend on a mortgage, and in view of the economic outlook for 2023", comments Zoopla.
© 2022 AFP