The average price of a London home dropped 0.6% in September, the largest monthly fall in more than a year.
Increased mortgage rates “appear to be taking the heat out of the London property market”, said the Evening Standard. However, average prices remain high at £544,113, just £3,000 below the record set in August, according to Land Registry data.
The capital has been “squeezed higher by a shortage of properties for sale and a stampede of buyers keen to get on the ladder before mortgage rates rise to unaffordable levels”, said the paper.
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But agents are reporting a “slowdown in enquiries since Kwasi Kwarteng’s botched mini-budget” in September, it added.
The average five-year fixed mortgage rate has only just dropped below 6% for the first time in two months, but it is still higher than before the mini-budget when rates were around 4.75%.
Across Britain, there are “signs that more sellers, whose properties are sitting on the market and unsold, are willing to reduce prices in order to sell”, reported City A.M.
Rightmove’s director of property science, Tim Bannister, said the first-time buyer sector is “facing the biggest challenges after the sudden jump in mortgage interest rates”. And the average time it takes to sell a property has risen by eight days, from 32 in May to 40 in October, the site found.
Reports from Halifax and Nationwide also showed small month-on-month falls in house prices. “Experts anticipate more significant price drops next year amid the rising cost of living and soaring mortgage rates,” said Which? magazine.
Meanwhile, said CNN Business, renters, estate agents and property search specialists have described a “frenzied scramble” for London rental properties since the spring “as students and workers flocked back to the city after the pandemic”.
The surge in demand has “collided with a steep drop in supply”, with the number of rentals available in the capital falling by almost a quarter in the summer of 2022 compared with the summer of 2021. “Prices have soared as a result to all-time highs,” said the site. Data from SpareRoom, showed the average monthly rent, including bills, for a room in a shared home hit £933 in October, up 17% since before the pandemic.
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