Rolling overage of the latest economic and financial news, as Rightmove reports prices falling at the fastest rate in five years, for the time of year
Worryingly, business confidence in the UK has fallen to its lowest level this year, even though inflation expectations have eased.
The latest quarterly UK Business Outlook from Accenture and S&P Global has found that the net balance of firms expecting activity to increase over the next 12 months slid to +37% in October, down from +40% in June and +43% in February.
Despite the fall in confidence, UK business optimism still remained relatively high compared to global (+25%) and European (+16%) average, which fell by 3% and 9% respectively.
“Sales volumes will improve as buyers get used to higher rates and sellers become accustomed to lower asking prices.
The story of this slowdown is a double-digit fall in transactions rather than a dramatic price correction, which has been kept in check by weak supply. Unlike the pandemic or mini-Budget, there is no single reason that activity is weak.
In London, many house hunters don’t expect property values to fall much further; particularly as prices haven’t decreased to the extent as initially predicted by some.
As a result, buyers are currently more motivated to continue their property search. This boost in buyer confidence is further supported by last month’s announcement that interest rates remain at 5.25% for the time being.”
With prices coming down and expectations for further weakness in the housing market next year, this is very much a buyers’ market, particularly for individuals and families who don’t need to load up on debt. But many of those who need a mortgage have been spooked by the surge in borrowing rates, holding off until next year, hoping that borrowing rates will ease and mortgage affordability improves.
Plus sellers are less incentivised to list their properties at the moment given that they would most likely need to drop their asking prices.
