UK_house_buying_activity_drops_almost_a_third_in_a_year

Compared to last year, UK house-buying activity declined by a third due to interest rate surges.

According to recent data, the number of people buying homes has decreased by 30% from the same period last year as the UK housing market continues to be negatively impacted by high mortgage rates.

According to data released by the Yorkshire Building Society (YBS), the number of first-time home buyers has decreased by 21%, from 370,280 to 290,000, compared to last year.

The decline in the number of first-time homebuyers this year is a continuation of the 20-year high of over 400,000 in 2021, which was supported by government programs such as stamp duty incentives, altered work patterns, and low borrowing prices following the epidemic.

Nonetheless, compared to 53% in 2022 and 50% two years prior, the percentage of first-time buyers in the mortgage market rose marginally to 54% of new home purchase activity in 2023.

The percentage has risen dramatically from 41% ten years ago.

Based on UK Finance statistics up to September 2023, the Yorkshire Building Society anticipated the volumes for October, November, and December 2023 based on past trends for first-time buyers.

YBS director of mortgages, Ben Merritt, stated, “This demonstrates a positive ‘can-do’ sentiment with first-time buyers cutting their cloth in order to get on the housing ladder.”

As per YBS Group economist Max Shepherd, there may be some positive signs, and he stated further that “current market expectations suggest several rate cuts in 2024, which would ease mortgage rates in the first half of the year.”

“However, this isn’t all good news, as interest rates falling in this way reflects the poor health of the economy overall, which could mean low growth and higher unemployment, which would only increase the urgency around ensuring a concerted approach to supporting first-time buyers.”

The data is coupled with a December forecast indicating further declines in house values in 2024. As the market keeps trying to normalize following the post-Covid frenzy, housing platform Rightmove stated it anticipates asking prices to track about 1% down nationally by the end of the following year.

Next year, given the continued stretch of affordability, sellers will probably need to offer more aggressively in order to attract a buyer, and agents will need to put in more effort, in particular when it involves first-time buyers.

Additionally, Zoopla just released its November house price index, which indicated that homes were being sold for a significant discount. In the rest of the country, sellers were cutting their prices by £18,000, while in London, properties are selling for £25,000 less than what they were originally listed for.

- Published By Team Timeswire

Leave a Reply

Your email address will not be published. Required fields are marked *