Sellers were quick to readjust their expectations after the mini-Budget triggered a record withdrawal of mortgage deals from the market and skyrocketing rates, which dramatically reduced how much new buyers can borrow and bid on homes. Since the Chancellor announced his Growth Plan, the average rate on a two-year fixed rate mortgage jumped from 4.74pc to 6.11pc – the highest level for 14 years.
However, there was also a flurry of new offers and new listings, which climbed by 23pc and 22pc respectively. This was boosted by buyers and sellers who want to act quickly before rates rise further.
Anthony Payne, of LonRes, said: “The political and economic turmoil which followed the chancellor’s mini-Budget in the final week of September have undoubtedly led to uncertainty in the housing and mortgage markets.”
He added: “Anyone who can will simply sit and wait it out, hoping the uncertainty will pass sooner rather than later.”
The LonRes data covered “prime” London – which it classifies as the postcodes stretching between Hampstead, Hammersmith and Clapham.
Prime London sale prices in September were up just 0.7pc year-on-year and 2.4pc compared to pre-pandemic levels – a dramatic contrast to the rest of the country. Nationally, average house prices climbed by 15.5pc in July, according to the Office for National Statistics.
The rental market, however, was a different picture. Rents on newly-let properties soared by 20.5pc year-on-year and were 15.5pc higher than before Covid.