UK Homes Sale Falls To Lowest Level In More Than A Decade
The number of UK homes sold this year is expected to fall to the lowest level in more than a decade, as the soaring cost of mortgages puts off homebuyers. House sales reaching completion are expected to fall 21% year-on-year to about 1m in 2023, the lowest level since 2012, according to a report from the property website Zoopla. Annual house prices fell at the fastest rate in 14 years in July, by 3.8% according to Nationwide, as higher interest rates weighed on people’s ability to buy a property with a mortgage. The number of house sales completed securing a mortgage is forecast to fall by 28% this year, while cash sales will remain relatively resilient, falling just 1% in 2023, according to the report. A typical two-year fixed mortgage was 6.73% on Tuesday, and the average five-year fix was 6.21%, according to Moneyfacts. Some lenders have cut rates in recent weeks, however, as competition returns. Zoopla said: “Mortgage rates have started to fall slowly but rates need to fall below 5% before we see an increased appetite to move home in the second half of 2023.” It also said that over the last four weeks, demand for homes had been 34% lower than the average for the same period over the last five years. The report estimates that the cost of renting is on average 10% cheaper than making mortgage payments, despite high growth in rental rates in recent years. Lack of affordability is affecting the housing market the most in southern England, where average house prices are highest, meaning buyers need larger mortgages, bigger deposits and higher incomes to buy. Levels of market activity are holding up better in more affordable parts of the UK, including parts of Scotland.
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