The property market has yet to fully recover from the fallout from Liz Truss’s disastrous mini-Budget two years on from the calamitous Commons statement, it was claimed today.
Analysis by London’s biggest estate and lettings agency Foxtons shows that activity in the market is still depressed compared with levels in the run up to the “fiscal event” presented by her Chancellor Kwasi Kwarteng, which sent mortgage rates soaring.
On the day of the Mini Budget, the average rate for a two-year fix was 4.74 per cent. A month later, it had risen to 6.65 per cent, draining confidence from buyers.
Bank of England and Land Registry data compiled with Foxtons shows that in the year leading up to the mini-Budget there were 821,892 mortgage approvals and 1,277,320 property sales across the UK property market.
However, in the 12 months that followed the total number of mortgage approvals slumped by 27.8% to 593,394 while transaction volumes fell by 13.3% to 1,107,720. As a result of the depressed level of market activity the average UK house price fell by 1.8% over this period.
Although the market has picked up over the past year over the last 11 months just 941,300 transactions have been completed across the UK, while there were 617,266 mortgage approvals, a 4% increase on the 12 months that followed the Mini Budget, but still still well down on volumes seen in the 12 months leading up to it.
Foxtons CEO, Guy Gittins, said: “The notorious 2022 Mini Budget will go down in the history books, and there’s no denying the immediate and negative impact it had on both the UK property market and the wider economy.
“In the year that followed we saw mortgage approvals, transactions and house prices all take a downward turn, as market confidence dwindled in the face of strong economic headwinds.
“However, 2024 has been a story of property market positivity and we’ve seen more buyers returning to the market, more offers being made and accepted, and the prices being achieved also starting to climb.
“Of course, we’ve got some way to go yet before the property market makes a full return to pre-Mini Budget health, but current indicators suggest we’re heading firmly in the right direction.
“Unfortunately, it doesn’t look like our new Labour government has any plans to help hasten this return to form in the upcoming Autumn Statement, with no suggestions of any homebuyer incentives emerging as of yet.”
