Knight Frank: Property market picture remains clouded… – Estate Agent Today

The “great recalculation” of the property market will take at least six months to show, Knight Frank claims.

Tom Bill, head of UK residential research for Knight Frank, said former Chancellor Kwasi Kwarteng’s mini-Budget continues to “muddy the waters” of the property market.

This has left the market with some buyers still with mortgages approved before Kwarteng’s announcements riled financial markets, while others are facing higher rates.


He said: “We have a new Government, but mortgage rates are playing catch up and only declining slowly.

“It has created a disorderly picture for the UK housing market at the end of 2022, with a wide range of motivations prevalent among buyers and sellers.

“Some buyers have mortgage offers that pre-date the mini-Budget, which means moving quickly is more important that haggling on the asking price. In other cases, budgets have been cut as monthly repayments rise.”

Bill said more discretionary buyers will stay on the sidelines while many will have no option but to move now.

Until mortgage rates stabilise, he said, the great price recalculation after 13 years of ultra-low borrowing costs cannot take place.

Knight Frank has predicted a 10% drop in prices over the next two years but doesn’t believe there will be a cliff-edge moment similar to the 2008 financial crisis due to low loan-to-value lending, low supply and low unemployment.

The number of exchanges and new prospective buyers across the UK was broadly flat compared to the five-year average in November, Knight Frank data shows.

Meanwhile, the number of offers made was 18% lower, reflecting the volatile lending landscape, although it was an improvement on the decline of 24% recorded in October.

Bill added: “The pipeline of transactions is still relatively robust

The original article can be found here