UK property plummeting

A "For Sale" sign pictured outside a residential property in north London on September 30, 2022. AFP - ISABEL INFANTES

Text by: RFI Follow

1 min

Worrying new indicator for the British economy.

Demand for real estate purchases has fallen by 44% since the end of September.

The announcement of the mini-budget by the government of Liz Truss, since replaced as Prime Minister, triggered panic in the markets.

There are no more buyers. 

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First consequence of soaring borrowing rates.

They were over 6% at the start of October.

In this context of high inflation, the British no longer invest in real estate.

Sales fell 28% according to a real estate site.

They are back to pre-Covid-19 pandemic levels.

The measures announced by the government of Liz Truss have caused severe turbulence in the markets.

The cancellation of this budget plan by Jeremy Hunt, the new Chancellor of the Exchequer, caused mortgage rates to fall slightly.

They should be around 5% at the start of next year.

But the prices will definitely go down.

The market cannot cope with this excessively weak demand in the longer term. 

However, buyers' financing difficulties should not improve.

2 million households have taken out loans at variable interest rates.

3 million will have to renegotiate their loans.

At the risk of no longer being able to follow the imposed rhythm.

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• UK

• Economic crisis