Demand is now at its weakest since the pandemic began, with the number of agreed new sales also down 15% over the past week, according to Zoopla
Demand for real estate has plummeted by a fifth since the mini-budget, according to Zoopla, as experts warn that “storm clouds are visible in the housing market”.
The site said demand is now at its weakest level since the pandemic began and the number of agreed new sales has also fallen 15 percent over the past week.
Separate data from the Royal Institution of Chartered Surveyors (RICS) showed that inquiries from new buyers had also fallen for the fifth straight month.
It said inquiries were down 36 percent in September, which means, unsurprisingly, sales were down too.
Experts expect this trend to continue over the next 12 months as the interest rate outlook takes its toll.
Simon Rubinsohn, Chief Economist at RICS, said: “The turbulence in mortgage markets in recent weeks has exacerbated rising levels of economic uncertainty stemming from higher energy bills and the broader cost of living crisis, shifting the scale in the housing market.
“Storm clouds are visible in the deterioration in near-term expectations for both pricing and sales. In the longer term, the picture of the RICS survey has clearly shifted into the negative.”
He added that mortgage arrears and possessions will inevitably increase over the next year as pressure on homeowners mounts.
The housing market has endured a turbulent period in recent weeks, with mortgage rates soaring, forcing many out of the market and causing thousands to pay hundreds of pounds more a month on their bills.
Currently, the average two-year fixed-rate mortgage is 6.46 percent, while the average five-year term is reported at 6.32 percent Moneyfacts.de Data.
That increase represents a 25 to 30 percent hit to the purchasing power of homebuyers who use a mortgage, said Richard Donnell, executive director at Zoopla.
For those who still want to proceed with a purchase, buyers and sellers need to be realistic, he said.
“With higher mortgage rates hurting purchasing power, the key is to look broader and consider other areas that may offer better value for money.
“Sellers and buyers must be flexible and realistic in the face of the changing economic environment. It’s not an easy task. But for dedicated movers with cheap mortgages, the push forward should remain.”