After the UK announced the “Mini-Budget” in advance and raised interest rates again, the local housing market was shocked: in addition to the withdrawal of around 1,000 mortgage products, some banks immediately suspended mortgage applications at a fixed rate. Another survey found that some homeowners sold their properties due to the pressure of rising interest rates, including price-split listings in Manchester and some listings were sold after the 20% of the ads had been sold for 3 months; A cumulative reduction of 17%. (Written by: Wendy Global Real Estate)
Nearly 1,000 mortgage products removed in a single day after the mini-budget
The Bank of England raised its interest rate to 2.25% at the end of September. British real estate agency Jackson Stops conducted a survey of active property owners across the UK and found that the 61% of homeowners sold their properties due to rising interest rates. At the same time, Rightmove’s September data showed that the number of listings increased by 16% year-over-year, returning to the level of 2019.
Nearly 1,000 mortgage loan schemes were removed overnight after UK Chancellor of the Exchequer Kwasi Kwarteng announced the mini-budget. Moneyfacts, a financial information firm in the UK, said there were 3,596 mortgage loan products on the market on Tuesday, but the number dropped the next day to 2,661. There were 935 cancellations in a single day, the biggest drop since November 2011.
The market predicts that the UK interest rate could nearly double in the first quarter of next year, from 2.25% to 6%, but the local HSBC 5-year fixed mortgage rate rose to 6.04%. last week. , there are many discount offers on the market. , especially in Manchester, where Hong Kong people are keen to invest, there are two-bedroom townhouses (Terrace) and three-bedroom semi-detached houses (Semi-detached).
Townhouses with two bedrooms are reduced by 20% in 3 months and the owner earns twice as much
Among them, the postcode is M40, which is located on the corner of Beechdale Close (End of Terrace), adjacent to Dean Lan Station. The asking price in July was 175,000 pounds (about 1.55 million Hong Kong dollars), and was reduced to 175,000 pounds after the announcement of the rate hike in August (about 1.51 million Hong Kong dollars) , and after the introduction of the mini-budget at the end of September, the price was immediately reduced to 140,000 pounds (about 1.24 million Hong Kong dollars) and the transaction was completed, with a cumulative drop of 20% in 3 months. The first owner bought it for £ 70,000 in 2006 and earned £ 70,000 or doubled after holding the stock for 16 years.
In addition, a three-bedroom semi-detached house with postcode M19 and Park Grove, adjacent to Levenshulme station, went on sale at the end of September at an asking price of £ 300,000 (approximately HK $ 2.66 million. ). it was reduced to £ 250,000 within 4 days of the introduction of the mini-budget, a drop of nearly 17%.
In addition, postcode M43 also has a reduced price. Among them, the three bedroom duplex house on Sunnyside Road is adjacent to the Droylsden tram station. The original asking price in early September was £ 190,000 (approx. 1.68 million Hong Kong dollars), but after the introduction of the budget below 1 In January the price was reduced to 160,000 pounds (about 1.42 million Hong Kong dollars), a drop of almost 16 %.
Veteran investors see an unfinished sell-off but rents continue to rise
Erik, a senior investor who currently owns 6 properties in the UK, said the M40 area was priced earlier because it is not a good traditional area and will be the first to fall back when the market falls. that the north-east area is relatively “varied” and public safety is poor. He also pointed out that due to the unpredictable pace of interest rate hikes in the UK, many landlords are struggling to provide property. In the future, there may be more landlords who “can’t afford housing” to sell their properties. at the same time, the rent increase next year is expected to be stronger than this year. According to HomeLet’s September Rent Index, the average monthly rent in the UK is now £ 1,159 (around HK $ 10,270), an increase of 9.2% year-over-year and a monthly increase of 1. 4%.
It can be used as a USD term deposit hedge or early repayment hedge to resist the magic of interest rates
Erik also predicts that the rate on 5-year fixed-rate mortgages could rise to 8% next year.At present, many large banks removed fixed-rate mortgages from their shelves last week, reflecting bank caution. in approving loan products, and also involving some approved loan products. Faced with the pressure of interest rate hikes, he suggested that investors can make fixed USD deposits to cover. Currently, the HSBC Premier Account in the UK has a fixed deposit of USD 500,000 and the one-year interest rate. it is 3.83%; in addition, the owner can also repay the loan early, but must face a period of interest on arrears.
Originally posted on AM730 https://www.am730.com.hk/Real Estate / Overseas Property Market Topics-Rising UK Interest Rates Triggers Price Hike in Manchester City / 341828? utm_source = yahoorss & utm_medium = referral
