?? Plummeting pound shakes mortgage market and creates fears for house price drop

Tax cuts, less mortgages and higher rates

• On Friday the 23rd of September, Chancellor Kwasi Kwarteng announced a permanent Stamp Duty cut.

Three things to note about this development:

1. If you are buying a property, you don’t have to pay tax for the first $250,000 of its value. That is 2x the previous number ($125,000).
2. If you are a first-time buyer, the tax liability threshold is now $425,000, previously $300,000.
3. All in all, it is quite beneficial for buyers.

This looks like an obvious move to increase homeowners, but a senior finance?analyst at Hargreaves Lansdown, Sarah Coles, says it will be temporary, as the?real?issue is not the lack of demand, but supply. (Read more).

• Talking about supply and demand, let's have a look at the figure above (source linked to the image), showing how supply of rooms have changed in two years, No doubt, a tax cut is not going to fix this.
• Pound is slumping and the mortgage market is also not doing so well.?Moneyfacts.co.uk?counted all available mortgage products in the market and found that between last Friday and Wednesday there were?935 of them?less!?That’s right; In just three days mortgage products dropped from 3,961 to 2,661.
• Not unrelated, house prices could?drop up to 10%?next year, a senior mortgage technical manager at John Charcol said.
• The Bank of England contemplates one more rate increase, the biggest in 33 years! This comes out as a monetary tightening policy as inflation is surging and the pound tanks every day. (Financial Post)
• For a buyer with a ￡200,000 mortgage, a rise of this size equates to an additional ￡1,872 in interest across the lifetime of the deal.
• According to Neal Hudson (BuiltPlace), a 6% mortgage rate could widen the gap between an average home mortgage bill and what a typical buyer could afford, to 71%, leading to even higher unaffordability and diminished sales.
• To add to the complexity, the BOE’s nine-member Monetary Policy Committee aims to sell ￡895 billions in bank assets. With a lot of variables coming into play, the economy is in a questionable state, as these decisions are expected to further stimulate the turbulence.
• With rate hike fears and the pound falling to a record low, Britain’s homebuilders index faced the hammer too. It fell by 6%, the?lowest since 2013, says Reuters.
• Where is this all going, you ask? Well, we’d like to retweet that question, as we’re also mere spectators at this point.
• As we reported in our previous newsletter (dated September 13), the average UK price peaked in August at?￡294,260. However, UK house prices are expected to come down by 4.5% next year. However, new data says?this is unlikely to help young buyers.
• At adjoin, we tackle this exact problem: building housing wealth using an affordable entry point, allowing buyers to rent first and buy later. Email us?now?and find out how you can benefit.
• With mortgage rate increases, stamp duty cuts, the cost of living crisis,?peak annual contraction forecasted at 6.2%, and a recession on the cards, the year?2023 is going to be a ride?to watch out for.
• Talking about the cost of living crisis, here’s something else you should know:?20% of tenants have moved home?as a result of it. Somewhat harsh,?to constantly adapt and having to settle with a falling lifestyle to afford a decent life. The dream of owning a home is moving far from reach: in?years and pounds.

Want to learn more about Adjoin Homes and how you can benefit? Join our waiting list now https://www.adjoinhomes.com/register/

?? 'Hood in the spotlight: Shrewsbury

Good news for lovers of contemporary art

Dubbed as the grandparent of the modern skyscraper, the Shrewsbury Flaxmill Maltings has opened its doors to visitors after an 8-year restoration project by Historic England.

But why is it called the grandparent of modern skyscrapers? It was built in 1797 and became the world’s first iron-framed building. It paved the way for the construction of skyscrapers like Shard and Burj Khalifa!

The building now has a new and permanent exhibition centre known as The Mill. Lovely, don’t you think?

Designed by Mather & Co. after consulting the local people, communities, and organisations, the aim is to “not only work around the historic features but celebrate it as part of the story”.

The themes will explore contemporary issues such as:

• Working conditions
• Climate change
• Technology
• Pay

(Read more)

The Mill sounds exciting. I plan to visit sometime and bask in the experience. You should too if this is your jam. Here’s the?official website.

P.S: We talked about this on our Twitter. Follow us there @adjoinhomes :)