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Many postponing plans but ‘determined buyers’ adjusting to high mortgage rates

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  • 25/07/2023
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Many postponing plans but ‘determined buyers’ adjusting to high mortgage rates
Around 36 per cent of prospective buyers hoping to move within the next two years, are postponing or paused plans to buy due to the volatile mortgage market, research has shown.

According to Bloomberg Intelligence, which surveyed 1,000 adults aged between 25 and 68 with a gross annual household income of £45,000, this is down from 44 per cent after the mini Budget.

The firm said that this implied there was more resilience versus October and this group was relatively-speaking, looking to buy sooner.

Around 50 per cent of that group said they intended to buy a house in the next one to two years, which compares to 56 per cent in October.

A further 28 per cent want to complete on a deal in seven to 12 months and 17 per cent are looking to buy in four to six months. Both figures are up from October’s 27 per cent and 12 per cent respectively.

Around 32 per cent of buyers with unchanged schedules aim to buy in the next six months.

Nearly 35 per cent of buyers, 44 per cent in London, have accelerated their plans, and within this cohort, 44 per cent plan to buy in the next six months. This rises to 55 per cent in London.

The research said that personal circumstances were the most-important reason for buying sooner, cited by 29 per cent of respondents. This fell to 21 per cent in London.

Just over a quarter of buyers – or 26 per cent – said fear of house prices rising more was driving them on, rising to a third in London.

Buyers’ desire to lock in mortgage rates accounted for 18 per cent of participants decision to accelerate plans.

Iwona Hovenko, real estate analyst at Bloomberg Intelligence, said that its findings indicate “determined buyers may be slowly getting used to higher rates”.

She pointed to the improvement in survey participants since October in those who said rising mortgage rates would prevent or delay house purchases.

Hovenko added that another 16 per cent said rates would not derail their plans, an improvement on 11 per cent in October.

She continued that respondents also continue to “show significant flexibility, which may support sales”, with many opting for cheaper properties, extending mortgage terms and making other savings.

Hovenko said this suggested “buyers are keen to make their next move on the housing ladder quickly”.

“Londoners seem more likely versus rest of the UK to extend their mortgage terms, but less keen to save elsewhere,” she said.

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