After the UK announced the “Mini Budget” earlier and raised interest rates again, the local property market was shocked, In addition to withdrawing around 1,000 mortgage products, some banks immediately suspended fixed rate mortgage applications. Another survey noted that some property owners had sold their properties due to the pressure of rising interest rates. Among them, price sharing listings began to emerge in Manchester, with some listings sold after 20% of the listings were sold for 3 months; Cumulative discount of 17%. (Written by: Wendy Global Real Estate)
Almost 1,000 mortgage products were scrapped within one day of the budget cuts
The Bank of England raised the interest rate to 2.25% at the end of September The British real estate agency Jackson Stops conducted a survey of active property owners across the UK and found that 61% of property owners had sold their property due to rising interest rates. At the same time, Rightmove’s September data showed that the number of listings increased by 16% year on year, returning to 2019 levels.
Almost 1,000 mortgage loan schemes were axed overnight after the UK Chancellor of the Exchequer, Kwasi Kwarteng, announced the small budget. Moneyfacts, a UK financial information company, said there were 3,596 mortgage loan products on the market last Tuesday, but the number dropped to 2,661 the next day. There were 935 cancellations in one day, the biggest drop since November 2011.
The market predicts that the UK interest rate could almost double in the first quarter of next year, from 2.25% to 6%, but HSBC’s local 5-year fixed mortgage rate rose to 6.04% last week. , there are many discount offers in the market. , especially in Manchester, where Hong Kong people are keen to invest, there are two-bedroom terraced houses (Terrace) and three-bedroom semi-detached houses (Pâr).
Two bedroom townhouses are reduced by 20% in 3 months, and the owner earns twice as much
Among them, the postcode is M40, located on the corner of Beechdale Close (End of Terrace), near Dean Lan Station. The asking price in July was 175,000 pounds (about 1.55 million Hong Kong dollars), and it was reduced to 175,000 pounds after the announcement of an interest rate rise in August (about 1.51 million Hong Kong dollars), and after the introduction of the small budget at the end of September, the price was immediately cut to 140,000 pounds (about 1.24 million). Hong Kong Dollar) and the transaction was completed, with a cumulative discount of 20% in 3 months. The first owner bought it for £70,000 in 2006 and made £70,000 or double that after holding it for 16 years.
In addition, a three-bedroom semi-detached house with postcodes M19 and Park Grove, near Levenshulme Station, was put up for sale at the end of September with an asking price of 300,000 pounds (about 2.66 million Hong Kong dollars). It was reduced to 250,000 pounds within 4 days of the introduction of the small budget, a reduction of almost 17%.
In addition, the M43 postcode also has a reduced price. Among them is the three-bedroom semi-detached house on Sunnyside Road near Droylsden tram station. The original asking price in early September was 190,000 pounds (about 1.68 million Hong Kong). dollars), but after the presentation of the budget, less than 1 In January, the price was reduced to 160,000 pounds (about 1.42 million Hong Kong dollars), a reduction of almost 16%.
Sophisticated investors see unfinished sales, 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 traditional good area, and it will be the first to fall back when the market will fall. that the north-east area is relatively “diverse” and that public safety is poor. He also drew attention to the fact that many landlords are struggling to supply properties due to the unpredictable pace of interest rate increases in the UK. In the future, there may be more landlords who “can’t afford houses” to sell their properties. at the same time, it is expected that the rent increase next year will be stronger than this year. According to HomeLet’s September rent index, the average monthly rent in the UK is now £1,159 (about HK$10,270), an increase of 9.2% year-on-year and a monthly increase of 1.4%.
It can be used as a hedge of USD time deposit or early repayment to resist interest rate magic
Erik also predicts that the rate on the 5 year fixed rate mortgage could rise to 8% next year Currently, many major banks have taken fixed rate mortgages off their shelves last week, reflecting the wisdom of banks in approving loan products, and also affect some approved loan products Mortgage. Faced with the pressure of interest rate hikes, he suggested that investors can make fixed deposits in USD to hedge Currently, the HSBC Main Account in the UK has a fixed deposit of USD 500,000, and the one-year interest rate is 3.83%; in addition, the owner can also repay the loan in advance, but must face a penalty interest period.
Original article published on AM730 https://www.am730.com.hk/Real Estate/Overseas Property Market Special – UK interest rate fire price surge in Manchester City/341828?utm_source=yahoorss&utm_medium=referral
