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Rates cut and fall-throughs down as market shows resilience
Thursday, August 24, 2023
TwentyCi, which analyses 99.6% of all UK sale and rental moves, provides a comprehensive review of the UK property market. Its Q2 Property & Homemover Report shows a UK housing market which is holding up well despite some tough economic conditions. According to the latest market update, there are ‘no signs of a housing market crash,’ based on Q2 sale volumes and a significant 70% of all properties listed being sold thus far in 2023.
In June, UK mortgage approvals were at their highest point since October 2022. Contributing factors included wage growth, high employment and the greater availability of longer fixed-rate mortgages. Nationwide Building Society this week announced new rate cuts of up to 0.4% on fixed mortgage products, while Santander reduced rates on residential fixed rate mortgage products by up to 0.2%.
Henry Jordan, director of home at Nationwide Building Society, said: “As economic conditions continue to stabilise, we are able to make further cuts to our mortgage rates, building on the reductions we have made in recent weeks.” Home-movers appear to be set for a period of stability in the mortgage market according to Rightmove’s mortgage expert, Matt Smith. “The positive direction for rates continues this week albeit a little more slowly, with five-year rates edging down slightly more than two-year equivalent products. We are likely to see a continued period of stability for home-movers at least for now, and while the market remains sensitive to any surprises, it appears that lenders will continue to price competitively where they can.”
Graham Sellar, head of business development, Mortgages at Santander, commented: “We are delighted to be able to help borrowers access cheaper loans with further reductions to our fixed mortgage rates. Santander is also continuing to support first-time buyers, providing £500 cashback to help with the costs of buying their first home.”
Kim Kinnaird, mortgages director for Halifax, said: “We don’t yet know what the ‘new normal’ looks like for mortgage rates and house prices over the longer-term. But we expect the market to rebalance as both buyers and sellers adjust their expectations to reflect higher costs and lower demand. It’s likely the gap between average earnings and property prices will narrow over time, which will be welcome news to first-time buyers in particular, especially in areas which could offer better value for money.”
The volume of ‘fall-throughs’ in property sales has also reduced by more than 6% since March this year bringing the figure into line with the pre-pandemic level of July 2019 while the average ‘time to exchange’ has fallen to 113 days in July, according to TwentyCi.
For more information about the local property market or for a free, no obligation appraisal of your property for sale or to let, please contact your local Frost office.
