UK households are facing an avalanche of cost pressures triggered by rising interest rates and the worst cost-of-living crisis in a generation. Key mortgage rates soared above 6% again this summer, and homebuilders including Ballymore Properties and Vistry Group Plc have already said they’re planning to cut staff numbers.
No surprise then that Britain’s property market showed signs of slowing to a crawl after a jump in mortgage costs reduced both buyer demand and the volume of sales. The figures add to evidence that the housing market is weakening after the quickest series of increases in interest rates lifted the cost of mortgages. Lenders including Nationwide and Halifax say property prices are falling, and some expect a peak-to-trough slump of 10% to 12% is “very likely.”
The Royal Institution of Chartered Surveyors (RICS) UK Residential Survey for July 2023 says at the national level, new buyer enquiries posted a figure of -45%, like last month’s figure of -46%. As a result, this metric continues to signal a sharp downturn in buyer demand following the latest escalation in mortgage interest rates. When viewed at the level of the English regions and the four nations, all parts of the UK display a firmly negative return for new buyer enquiries over the month.
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