Despite political and economic uncertainty in October, 74% of active buyers in the UK were confident that they would purchase a property within the next three months, the latest OnTheMarket property sentiment index finds.
Buyer determination in October filtered through to sellers, with 82% confident that they would sell their home within the next three months, up from 79% in September.
Meanwhile, 60% of properties were sold subject to contract (SSTC) within 30 days of first being advertised for sale, compared with 56% in October last year.
OnTheMarket chief executive Jason Tebb says: “This increase in the volume of new properties going under offer within the first month of marketing may suggest an urgency among buyers with mortgage agreements secured some time ago, who may be keen to proceed before those offers expire.”
“This is understandable as many of these rates will be significantly lower than current mortgage rates, which shot up following swap rate volatility after the mini-budget.”
“This could be helping focus buyers’ minds and encourage them to put pressure on their conveyancers to get deals done before the expiry date.”
The data also found that the national average increase in seller sentiment masks some significant regional swings.
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In the East Midlands, sellers that were confident that they would sell their properties in the next three months went up by eight percentage points last month while in the South West and Wales both saw a seven percentage point rise in confidence.
However, in the North East, there was a one percentage point drop in seller confidence compared with September.
Tebb comments: “It seems astonishing that despite macroeconomic headwinds, and predictions from many estate agents that property prices will fall next year, serious sellers and buyers alike remain keen to proceed.”
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The index shows that only 5% of movers were concerned about securing a mortgage to fund the purchase of their next property last month, a slight increase compared to the 4% in September.
Of those in Greater London, 36% of respondents already had their mortgage agreement in principle in place prior to starting their search for a property.
The South West had the lowest number of respondents with 20% having a mortgage agreement in principle in place before starting their property search.
Elsewhere, 24% of movers hadn’t considered applying for a mortgage before starting their property search, with buyers in Greater London the least likely to have considered applying for a mortgage before starting their search for a property.
Just under half, 41%, said they didn’t need a mortgage in order to purchase a property.
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Greater London had the lowest number of respondents who indicated that they wouldn’t require a mortgage to purchase a property at 24% while Scotland had the highest number at 53%.
Tebb explains: “Some stability has returned to the market with the appointment of Rishi Sunak as prime minister and the reversal of many of the mini-budget measures. However, mortgage rates remain significantly higher than they were this time last year – the days of sub-1 per cent fixed-rate mortgages are long gone.”
“Challenges remain and the coming months are likely to be tough as the Bank of England raises rates further in an effort to bring inflation down. Encouragingly, however, the forecast for where rates might peak has fallen as some of the market turmoil has dissipated. Rock-bottom interest rates aren’t normal or sustainable and the new norm, which is slowly starting to establish itself, is beginning to look a lot like the old one.”
By Becky Bellamy
Source: Mortgage Finance Gazette