The mini budget – an outlook on the property market since its announcement

The announcement of the mini budget on the 23^rd of September by the ex-chancellor Kwasi Kwarteng, had left many vendors, or households looking to buy, seriously considering the positive and negatives of making the jump, in the current climate. With the demand for homes falling by a fifth since the announcement and the number of new sales agreed also dropping by 15% over the last week, the stats were showing that the uncertainty of what is to come, had significantly disrupted the market. But with Jeremy Hunts appointment, and his changes to the previously announced mini budget, some experts have predicted that his move to scrap nearly all of the announced tax cuts, will help steady the market before the downward spiral continues.

One of the few tax changes that survived Hunt’s new announcement, that some believe will positively impact the market, is the stamp duty cut. Kwarteng confirmed a permanent stamp duty cut with no tax to be paid on property up to the value of £250,000. For first time buyers, the level will rise from £300,000 to £425,000, in a move to increase ownership. Although for many, this cut continuing to be included in the new budget is welcomed, experts believe that it will benefit UK’s wealthier homeowners and buyers and in the long term, will worsen inflation. However, some analysts have said that without efforts to boost housing supply, inflation will continue to rise, with no support for those struggling to get on the housing ladder.

The increasing new mortgage rates have arguably had the largest impact on the housing market, as potential first-time buyers and homeowners have struggled to make the new costs work. Although many mortgage lenders effectively closed their doors to any new applications after the original mini budget announcement, some lenders are starting to relaunch deals, in the last few days. But unfortunately, hopes that the newest announcements would bring cheaper fixed-rate mortgage deals, has yet to come into fruition. Analysts do have hope that this will come in the short term, helping the market to bounce back, but experts agree that the era of locking in a mortgage rate of less that 1% is over.

With the newest announcement being so fresh, for many experts, it is hard to predict what the market holds and how well it will bear up under the economic climate conditions. Although it has already been confirmed by Andrew Bailey, the Bank of England governor, that there will be a sizeable interest rate rise on 3^rd November, the recent U-turns could mean the increase to the base rate will rise by a smaller amount, giving some hope to potential buyers juggling all economic pressures. With Hunt’s changes hopefully instilling some confidence, and support already in place with energy bills and SDLT cuts, experts are hoping that lenders will also now play their part and adjust products accordingly to help support both homebuyers and homeowners, and help the market get back on track after a very daunting three weeks.

If you need to sell your home quickly, UK Homebuyers Ltd can give you an offer, no matter what the condition or location. Our customer service line is open 24/7, just call 0333 255 0575 for a quick offer or fill in our online form to obtain your free no obligation cash offer.