After the UK announced the “Mini-Budget” earlier and raised interest rates again, the local property market was shocked. In addition to the withdrawal of about 1,000 mortgage products, some banks immediately suspended fixed-rate mortgage applications. Another survey pointed out that some property owners sold their properties due to the pressure of raising interest rates. Among them, price-splitting listings began to emerge in Manchester, and some listings were sold after 20% of the listings were 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 the interest rate to 2.25% at the end of September. The British real estate agency Jackson Stops conducted a poll of active property owners across the UK and found that 61% of property owners sold their properties because of 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 the level of 2019.
Nearly 1,000 mortgage loan schemes were removed overnight after the UK Chancellor of the Exchequer Kwasi Kwarteng announced the mini-budget. Moneyfacts, a financial information company in the UK, 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 a single day, the biggest drop since November 2011.
The market predicts that the interest rate in the UK may nearly double in the first quarter of next year, from 2.25% to 6%, but the local HSBC 5-year fixed mortgage rate has risen to 6.04% last week. At the same time, there are many discount offers in the market. , especially in Manchester, where Hong Kong people are keen to invest, there are two-bedroom terrace houses (Terrace) and three-bedroom semi-detached houses (Semi-Detached).
Two-bedroom townhouses are reduced by 20% in 3 months, and the owner earns twice as much
Among them, the postal code is M40, which is located at 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 it was reduced to 175,000 pounds after the announcement of interest 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 instantly cut to 140,000 pounds (about 1.24 million Hong Kong dollars) and the transaction was completed, with a cumulative decrease of 20% in 3 months. The first owner bought it for £70,000 in 2006 and earned £70,000 or doubled after holding it for 16 years.
In addition, a three-bedroom semi-detached house with postcodes M19 and Park Grove, adjacent to Levenshulme Station, was put on sale at the end of September with an asking price of 300,000 pounds (about 2.66 million Hong Kong dollars). The price was reduced to 250,000 pounds within 4 days after the mini-budget was introduced. A drop of nearly 17%.
In addition, the postcode M43 also has a reduced price. Among them, the three-bedroom semi-detached house on Sunnyside Road is adjacent to the Droylsden tram station. The original asking price in early September was 190,000 pounds (about 1.68 million Hong Kong dollars), but after the budget was introduced, less than 1 In January, the price was reduced to 160,000 pounds (about 1.42 million Hong Kong dollars), a decrease of nearly 16%.
Veteran investors see unfinished sell-off but rents continue to rise
Erik, a senior investor who currently owns 6 properties in the UK, said that the M40 area was priced out earlier because it is not a traditional good area, and it will be the first to fall back when the market falls. He also pointed out that the northeast area is relatively “miscellaneous” and the public security is poor. He also pointed out that due to the unpredictable pace of interest rate hikes in the UK, many landlords are struggling to supply properties. In the future, there may be more landlords who “can’t afford housing” 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 rental 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 5-year fixed-rate mortgage rate may rise to 8% next year. At present, many large banks have removed fixed-rate mortgages from their shelves last week, reflecting the prudence of banks in approving loan products, and also affecting 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 Premier 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 he must face a penalty interest period.
Originally published on AM730 https://www.am730.com.hk/Real Estate/Overseas Property Market Topics-British interest rate hike triggers price surge in Manchester City/341828?utm_source=yahoorss&utm_medium=referral