Figures from property platform Rightmove show that buyer demand fell by 20% in October compared to a year ago, as house hunters suspended their property searches in response to rising borrowing costs and growing economic uncertainty. Interest rates rose last month after Liz Truss’s mini-budget, adding hundreds of pounds to mortgage payments. About a year ago, the average new two-year fixed rate was 2.25%, but in recent weeks new rates have topped 6%. Rightmove’s monthly house price index showed that first-time buyers were the most reluctant, with demand falling by 26% in October. Demand from ‘second movers’ hoping to move out of their first home fell by 17%, while interest among those at the top of the property ladder fell by 15%. Research from the Royal Institution of Chartered Surveyors published last week revealed that new buyer inquiries fell for the sixth consecutive month in October and survey feedback on buyer demand was negative across the UK. It now takes an average of 18 weeks to sell a property, up from 16 weeks typically a year ago. However, despite the drop compared to last year’s figure, Rightmove said buyer demand was still up 4% on 2019’s pre-pandemic levels. Tim Bannister, Rightmove’s director of property science, said: “While many go ahead with moves, especially those with a purchase already agreed, it’s understandable that there are people who stop to think. “There is a group that is ready and able to move and is waiting on the sidelines for more financial certainty. Then there’s a group of first-time buyers or people hoping to trade up who were already stretching themselves financially and may now have had their plans cancelled.’ The slowdown in market activity has led more sellers to lower their asking prices in an effort to agree to a faster sale. In October, 8% of unsold properties on Rightmove fell, double the 4% recorded in the same month in 2021. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. However, it is only a small increase on the 7.5% of unsold properties that fell in October 2019. “The era of historically low interest rates and buying frenzy is over, which could pave the way for a more normal market that opens up potential opportunities for those who have been put off entering the frenzy of the past two years,” Bannister said.
