What has occurred to the housing market since the mini-budget?

On September 23, Chancellor Kwasi Kwarteng unveiled his mini-budget,' which included tax cuts across the board, including a drop in Stamp Duty Land Tax (SDLT) in England and Northern Ireland.

Nov 12 | 5 minutes read
What has occurred to the housing market since the mini-budget?

The previous day, the Bank of England raised interest rates for the seventh time in a row, to 2.25%, the highest level since 2008.

There has been a lot of discussion about how these changes might affect the housing market since then.

So, because we can detect changes in home-moving behavior in real time, we took a closer look to see what's happened in the last two weeks.


What was going on prior to the unveiling of the mini-budget?

The coronavirus pandemic, as well as multiple lockdowns, had a huge impact on the housing market. We saw demand from people eager to move vastly outnumber the quantity of homes available for purchase, pushing average asking prices to an all-time high.

We've seen these massive levels of demand begin to drop throughout 2022, which is partly owing to more properties entering the market. And, more recently, we've begun to see signs of the housing market returning to pre-Covid levels of demand in 2019.


What happened to mortgage interest rates?

Mortgage rates have already been rising throughout the year prior to the mini-budget. However, these rates have risen higher in the last two weeks as a result of the unexpected tax cuts announced in the mini-budget. And unforeseen events in financial markets are likely to have a direct influence.

There has been much conjecture about how these changes may affect the UK's finances. The Bank of England is largely expected to raise interest rates faster and higher than previously predicted. This has had an impact on the underlying costs of fixed-rate mortgages, and it's also why some lenders have repriced packages, making them more expensive.

Mortgages are still accessible. A mortgage broker can assist you in determining what type of mortgage to obtain and how much you can borrow. They'll go over your individual circumstances to help you choose the best lender. And keep in mind that just because you've been turned down by one lender doesn't guarantee you'll be turned down by all of them.

mortgage interest rates


Are fewer people buying homes these days?

In times of economic change or uncertainty, consumers may reconsider whether large purchases they had planned to make still made sense for them. So, if you're currently in a property chain and waiting to move, you might be anxious about what's happening with the other people in the chain's moving plans.

However, in the last two weeks, the number of completed transactions has stayed nearly comparable to the more 'regular' housing market of 2019. And, for the most part, people aren't canceling previously agreed-upon deals.


Are people still listing their properties for sale?

There has also been much conjecture about the future of housing prices. And there was a risk that more people would have put their moving plans on hold, preferring to wait and see what happened.

However, compared to the two weeks preceding the mini-budget announcement, there has been a tiny increase (4%) in the number of new houses posted for sale. This is good news for anyone wishing to relocate because there are more possible properties to choose from, and it should help to limit the rate of house price growth.

property for sale


Are home sellers lowering their asking prices?

We've witnessed a very little rise (1%) in asking price reductions during the last two weeks, compared to the prior two weeks.

The current 23% of properties for sale with price reductions is much lower than the 32% average seen in the five years preceding the epidemic.

More than half (54%) of estate agents polled this week said new sellers, or those who have put their properties on the market since the mini-budget, are now more open to selling their homes realistically or are willing to take lesser offers.

If you're thinking about selling your home, one of the most crucial things you can do to ensure a buyer is to price it competitively from the start. This implies you're less likely to need to lower your prices in the future. You can use our sold prices tool to see what properties in your area have sold for.


Are there still people who want to move?

In the two weeks since the mini-budget, we've seen the same number of people looking at houses for sale on . However, compared to the two weeks before the mini-budget, we've witnessed a 12% decline in the number of persons enquiring to visit houses.

This could be because homebuyers are reassessing how much they can pay when interest rates rise, leading to an increase in the average mortgage rates available.

Some homebuyers may be thinking about whether they need to adjust their budget or whether they should hunt for a home in a cheaper home.

When comparing the two weeks before the mini-budget to the two weeks following, there has been no change in the number of sales agreed. This means that home moves are still taking place for individuals who are able to do so. Finding the home in which you want to make a lifetime of memories requires a longer-term attitude.


What will happen on October 31st, and why is it so significant?

The government is expected to release a thorough budgetary plan, as well as estimates from the Office for Budget Responsibility, towards the end of the month. These finer points will be critical, as the plan will define how the government intends to fund the tax cuts announced as part of the mini-budget.

It is hoped that once more specifics of the government's "medium term budgetary plan" are published, some of the market anxiety will begin to subside.

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