UK housing market suffers from mortgage chaos

According to the BBC's Today programme, Nationwide's chief economist Robert Gardner said, "A lot of this reflects the fallout of the mini-budget and the big rise in mortgage rates, because that really made things less affordable." He said if you look at the typical mortgage payment as a share of take-home pay, the typical first-time buyer running at close to long-run averages of 30%. As a result of the mini-budget, it has moved up to around 45% of take-home pay, which is a huge difference. He said that while the outlook was uncertain, a relatively soft landing for the market was still possible, given that employment rates are high and there is a lack of properties coming up for sale.

There is not one single single UK housing market to navigate, and all of these are general points. There are a series of local markets where price, demand and supply are affected by a number of variables, from local schools and housing developments to job opportunities and transport.

The latest data is likely to include only a week of sales agreed after mortgage chaos was unleashed. The effect of a sudden and possibly catastrophic loss of confidence is what we are seeing at the moment, as sales being settled were highly likely to have been funded by mortgages agreed well before everything kicked off.