Housing market ‘still moving’ as more lenders withdraw rates

Rightmove insists the housing market is still moving as more lenders removed deals yesterday.

Data from comparison website Moneyfacts shows there were 2,340 mortgage products available yesterday morning, down from 3,961 on Friday last week ahead of the mini-Budget.

It comes as mortgage lenders have been withdrawing rates amid the rising cost of wholesale funding and economic uncertainty following the Chancellor's much-maligned mini-Budget last week, making it hard for providers to price their products.

This has prompted further fears of a housing market downturn, with concerns that first-time buyers won’t pass affordability assessments or interest rate stress tests, while homeowners remortgaging or moving home with new deals may struggle to pay comparatively higher rates than they do now.

Rightmove housing expert Tim Bannister said the number of attractive mortgage deals tumbling is a “bitter pill to swallow” for those who want to move and those with fixed terms due to end.

He said it will impact buyers’ budgets, especially those who were already stretching themselves. 

But Bannister added that Rightmove data shows the housing market is market’s very much still moving.

The number of sales agreed on Tuesday was the highest number in one day since early August, data from the portal shows.

On Monday and Tuesday of this week, demand from buyers sending leads to agents and developers was down 3% compared with other Mondays and Tuesdays this month, while 1.6% of all properties were reduced each day.

Rightmove said this is the same level of reductions as seen earlier this month on Mondays and Tuesdays.

Fall-throughs remain line with what Rightmove has seen for all of September.

A longer-term look shows that buyer demand over the past month was 20% higher than the pre-pandemic five-year average, new sellers are up 8% on 2019 levels while asking prices are 15% higher than two years ago.

Bannister said: “The number of sales being agreed on Tuesday was at its highest number in a day since early August, perhaps as some people rush to get a mortgage before rates rise further.

“Over the past month activity has shown that the housing market has been surprisingly resilient against headwinds of rising rates and so it looks like for those who can move, they’re going ahead for now. 

“We’ve seen demand softening in the past few months, but buyer demand is still 20% higher than the pre-pandemic five-year average, house prices are 15% higher than they were two years ago, and the overall number of homes going through conveyancing is 40% higher than in 2019.”

It comes as a senior mortgage broker warned against talking the market down amid questions about whether a property market crash is imminent.

Ben Thompson, deputy chief executive of Mortgage Advice Bureau, said: “Were it not for the developments seen over the last week, this is a question that would instantly be shrugged off, even laughed off. 

“However, the current circumstances mean we now need to give this more consideration. For this to happen, we would need demand for housing to fall off a cliff in a very big way, as currently, even now, demand for housing still outstrips supply, meaning it looks unlikely to happen. 

“Much hinges on the extent to which interest rates rise and whether or not we see a wave of new and far reaching unemployment.”

“The most likely scenario is that demand falls back from current levels and that there is a flattening off in house prices from now onwards, and probably single digit falls on and off for a few months.”

Thompson suggested the positive from this would be that more first-time buyers could enter the market, helped a little by the recent Stamp Duty adjustment. 

He added: “This though of course depends on whether that, current policy, or even Government remains by then.

“The most important thing we can all do now is not talk the market down, as one hopes this mess is sorted out, and we return quickly to a normal market, whatever that is these days.”