November housing market data revealed the forecasts for a declining market are transpiring. It was inevitable that affordability would damper the hopes of home buyers as well as ever growing inflation and uncertainty in the economy. According to Nationwide, the average house price fell at the fastest rate in 2.5 years, with much of the blame on the mini-budget announcement that caused many homebuyers to pull out of already made deals. The average house price dropped from October by 1.4% to £263,788.

The UK lending market faltered during the month of October and likely due to the mini budget. An amazing 10% fewer mortgage approvals than in September occurred. The Bank of England reported 59,000 down from the previous month’s 66,000. According to data, more than 40% of the housing market activity disappeared as home buyers were left without the ability to buy due to affordability and pulled out of their deals.

The UK housing market is showing signs of cooling off. Since the pandemic’s race for space buying frenzy, house prices have been growing. There were numerous times last year when the average house price would reach a new high with each month. The rising house prices have helped push home values to quick gains, but it also pushed many hopeful home buyers out of the market. As interest rates began to rise, the combination of both the rate hikes as well as high priced properties was expected to put off buyers. 

As interest rates rise, many homeowners are at risk of going into negative equity. It is thought there are almost 90,000 homeowners that could find themselves owing more on their property than the value of it. Home values are expected to decline as the housing market loses home buyers. New homeowners that purchased their properties when the Bank of England’s standard base interest rate was at an historic low, namely in 2020 and 2021, are likely the most at risk.

The warning has been issued to homeowners of upcoming repayments that are likened to a “ticking time bomb.” Many could be facing interest rate payments possible of doubling each month according to research. The Liberal Democrats have released data analysis confirming that mortgage holders will be facing the largest increase in interest payments ever on record. The warning leaves little in way of preparing or finding a solution, but a remortgage could be quite helpful to homeowners seeking to defuse the bomb.

The UK housing market is facing factors that could hold it back and make more problems for the economy. It is a critical part of our economy, and a struggling market will only further hinder our economy as it struggles against inflation and a deep recession. It was hoped the Autumn Statement would announce more to help the housing market, but experts are remarking about the lack of support. Mainly there was little put into place to bring more supply to the market that could bring back first-time buyers and the minimal stamp duty reductions will only be left in place until March 2025.