Story for The Times: Mortgages - Buyer strike?

The last 10 to 14 days have seen property buyers retract faster than a greyhound leaving the blocks. This time of year should be one of the busiest, negotiating sales before the half-term break with the pre-Christmas buyers making offers. We are trying to hold off reducing property prices for our clients but many who do so are seeing the benefits and sales are happening. There are many reduced listings now and some vendors are even considering withdrawing their property from sale whilst we ride out the storm.

With so much uncertainty following the doomed mini-Budget, it's only natural for there to be bitterness and concerns about how the housing market will fair. With interest rates reaching eye-watering levels compared to what we have become accustomed to, and the realisation of a recession looming, the brakes have well and truly been pulled for many people who were previously considering moving. We've spoken to our own pipeline and have yet to see anyone pull out of their ongoing purchase. However, we've heard from some estate agents that up to 20% of their pipeline has had to be relisted due to chains falling apart post the mini-Budget. From our business perspective, we've seen the shift move heavily away from people looking to move, to people battening down the hatches while storm Truss unfolds.

Mortgage application levels may slow on the approach to Christmas, but this is often the case. This year may be slightly more affected as we see various other issues such as the rising rates and levelling out of house prices. We are still as busy as ever and showing no signs of slowing down, with people still out house hunting and many carrying on with their home buying plans. Rent has seen dramatic increases as landlords have seen their mortgages and other costs rise lately. These additional costs are being passed onto the tenant. This has caused many to accelerate their home ownership plans with help from the bank of mum and dad, whether that is in the form of joint borrower sole proprietor, gifted deposit or equity release products.

We're seeing mixed sentiment from Dollar-based buyers in central London. Discretionary buyers aren't as enticed by the sterling 'discount' that many say they are. They are more concerned about the economic instability it reflects. We have one US client who is happy to bide his time and see what 2023 brings. 'Needs-based' buyers, on the other hand, are taking a long-term view and pressing on. Nobody knows where we will be in six months' time. I'm not yet seeing major changes in central London, but there isn't the same heat to come out of the market compared with the rest of the UK. If buyers are hoping for a correction or crash, they will need to be patient.

We work across Swindon and North Wiltshire with several estate agents who seem to have gone mute over the last six weeks. Since the mini-Budget, all confidence in the housing market has disappeared. Rates are putting borrowers off, and those with cash are starting to think that bank deposits look more attractive with a much lower risk premium than entering a market that may crash in the near term. Properties will be staying on the market for much longer across all price brackets. First time buyers can't afford anything, those wanting to move up the ladder will be affected by much higher repayments on larger mortgages and distressed properties will sit idle until developer finance returns to a more normal level. Estate agents and mortgage brokers alike, might be able to take an extended break over the Christmas period.

One of my clients had finally found a new home after months of searching. However, their mortgage payments would have been £400 more expensive than the current rent they pay. Therefore, they are now going to stay put and not buy. They intend to review this in the new year. I feel in the short term, that this is going to be common. I was speaking to an Estate Agent, and he told me that buyers are pulling out and some people even taking their property off the market and not wanting to sell anymore.

We're seeing a lot of potential buyers holding off right now. Many express their fear and uncertainty about where mortgage rates and house prices are heading. There's almost an equal split between those clients who want to 'wait and see', and those trying to secure a mortgage deal now before rates increase again, particularly those coming off a fixed rate deal. What we're telling clients is not to overpay for a property. Especially if you only have a small deposit, as house prices are likely to fall significantly in 2023. Deals agreed significantly below asking price will become the new norm. The pendulum has swung the other way and it's a buyer's market now.

After record month after record month it seems to have dialled down. New enquiries from first time buyers are down and more people are open to discuss remortgaging. I’ve had a few people who were in the midst of finding a property, however their offers weren’t accepted util just after the impact of the mini-budget hit the mortgage rate market and now they have simply said it is just not affordable to buy. Given they were already looking at one bedroom flats it now like they could scale down what they were looking for. For the first time every I have just done an application for a couple buying a flat who’s mortgage payment is going to be more than the rent on an equivalent property, and that’s with a 37 year term! And I know it’s more than an equivalent property as they are buying the place they currently rent. They still want to go ahead though, after all, they’ll (hopefully) get most of the money back when they sell, whereas with renting they’d get zero return. On top of all this, let’s not forget that thousands of people brought forward purchases they may have been making now to 2020 and 2021 to take advantage of the stamp duty.