Housing market expected to benefit as Hunt rips up mini-budget
Jeremy Hunt’s move to rip up most of last month’s mini-budget should help strengthen a housing market that was beginning to wobble and could relieve some of the downward pressure on prices, analysts have suggested.
However, other experts warned the new chancellor’s intervention might not be enough to stave off the risk of “significant” house price falls, and that even if new mortgages did become temporarily cheaper, the sizeable interest rate rise expected in November meant many borrowers would still face hikes in home loan payments.
The estate agent Savills said that in many ways, Hunt’s announcement was “the best feasible outcome for the housing market” because it should reassure the financial markets, which in turn should mean “we can expect to see mortgage rates peak lower and fall faster once we pass peak inflation”.
Two things arguably support a more positive interpretation. One is that one of the very few tax changes to survive Hunt’s cull (for now at least) was the stamp duty shake-up. Kwasi Kwarteng last month cut stamp duty, raising the point up to which none is paid from £125,000 to £250,000, while for first-time buyers that threshold went from £300,000 to £425,000.
The other is that the latest data from the property website Rightmove, issued hours before Hunt’s announcement, painted a picture of a housing market continuing to defy gravity. It said the average price of a property coming to market rose by £3,398, or 0.9%, in the month to 8 October, to a new record of £371,158. A lot of this reflects ongoing shortages of property for sale.
However, it also found that buyer demand in the two weeks after the 23 September mini-budget was down 15% year on year.
“The market is looking less robust on a number of fronts,”
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