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Your November market update

Demand is falling and those in the home counties may be feeling the pinch — but some good news seems to be on the horizon for borrowers. We've got it all in your November market update.

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It’s been a busy month — and we know, we say that every month. But the truth is, the property market keeps making the headlines, and those changes are keeping us all on our toes. Feeling overwhelmed by the news of falling demand and rising mortgages? We’re here to talk you through it — and we may even have some good news buried in all the chaos.

Welcome to your November market update.

Demand falls and prices falter

You may have been a little shaken by some truly scary headlines — but it's our job to try to unpack them. Now, according to the latest Zoopla data demand for buying homes has fallen by a whopping 44% since the mini-budget. (What does the mini-budget have to do with it? Mortgage rates went up, and that pushed demand down as borrowing became less affordable.)

And this month, Zoopla says they’ve seen people settling below the asking price. And the headlines have been talking about it — a lot. But when you look into the data, it says that it’s about 3% below the asking price.

That’s certainly significant — and there’s every sign that the market will continue to slow — but that doesn't mean prices have fallen off a cliff, which the headlines can sometimes imply.

Not noticing this in your area? Well, it’s early days. And interestingly, the research found that the home counties were currently seeing more of the reductions — but this is an emerging trend, so it’s important to give time to see how it plays out. And remember, just last month we were still seeing a 7.8% year-on-year rise in prices. In other words, prices have been going up steadily for quite a while now — often in big leaps — so it may be a while before we notice the pinch.

Remember those mortgage rates we were talking about earlier? Well, there are some early signs they’re starting to come down."

Some good news for borrowers

In a teeny, tiny sliver of good news — remember those mortgage rates we were talking about earlier? Well, there are some early signs they’re starting to come down. Again, early signs — but something that may make some buyers breathe a tiny sigh of relief. 

For example, Sky News was reporting that the average 5-year fixed mortgage rate dropped below 6% for the first time in 7 weeks. Still, just below 6% can still feel like a huge challenge and a shock, especially in the recent years of historically low borrowing. But rates may continue to fall.

"Borrowers may well breathe a sigh of relief to see that fixed mortgage rates are starting to fall, but there may be much more room for improvement,” Rachel Springall, a finance expert at Money Facts explained. "... However, it is worth noting that rates could fall further still, but there is no clear answer as to how quickly that may be.” 

“Borrowers may feel they have to be patient for a little while longer yet before they commit to a new fixed mortgage, or even wait until next year to see how the market recovers from the recent interest rate uncertainty.”

So again, we’re seeing some short-term movement, but with all of the volatility we’ve seen in the last few months — or even the last few years — it’s natural to feel like we’re still on shaky ground. 

And it’s important to remember that there can be knock-on consequences elsewhere, like the fact that first-time buyers may feel the rise in rates particularly acutely, and that increased lending costs and decreased supply can push already eye-watering rents even higher (and renters are often the lowest down on the list for support). 

So what happened in November? A heck of a lot. The change in demand feels like a shift from the red-hot seller’s market we’ve seen over the last couple of years, but time will tell. And for mortgages, some good news as rates start to show signs of dipping.

With the holidays around the corner, we’d almost like to say that December will be a quieter month. But let’s be honest — we’ll have to wait and see. Either way, we’ll be back next month with your market update.