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Half of homes in Great Britain are taking longer to sell than last year as volatile conditions in the mortgage market amid the Iran war prompt buyers to “wait and see” if they can get a better deal, according to a report.
As the Middle East conflict continues to unfold, the property platform Zoopla said homes in 180 out of 363 local authorities in England, Scotland and Wales were taking longer to sell compared with a year ago.
It said that although the national average time to sell a home had not changed – at 42 days – a widening regional gap had emerged as buyers in property hotspots raced to complete deals, while uncertainty over mortgage costs fuelled a more cautious approach elsewhere.
The report found the UK’s 10 fastest-selling markets were all in Scotland, with the lowest average time to sell at just 11 days in Falkirk. Carlisle and Barnsley in England were the fastest non-Scottish markets at 23 days each.
It said eight local authorities had an average time to sell of two months or more, led by Melton in the East Midlands, at 76 days, Westminster in London, and Teignbridge in the south-west.
Property buyers shopping for a mortgage deal have faced months of heightened volatility as the stop-start Iran war rattles financial markets – with a knock-on impact for the pricing of home loans.
The war in the Middle East led many lenders to pull deals in March, while the cost of a typical home loan soared amid fears that the conflict would reignite global inflationary pressures and force the Bank of England to raise interest rates.
The latest figures from the financial data provider Moneyfacts show the rate on an average two-year fixed residential mortgage stood at 5.61% on Monday – significantly higher than the rate of 4.83% before the outbreak of the conflict at the end of February.
The rate peaked at close to 6% in April. However, uncertainty remains as the Iran war continues to unfold, in a challenge for Threadneedle Street’s rate-setters.
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Official figures due on Wednesday this week are expected to show soaring energy costs drove up UK inflation from 2.6% in June to 2.9% in July, raising City expectations for the central bank to raise borrowing costs. However, separate figures on Tuesday are expected to show a slowdown in the jobs market, which could encourage the Bank to delay taking action.
Financial markets anticipate two quarter-point increases in the Bank’s base rate, from the current level of 3.75%, before the end of next year.
Richard Donnell, an executive director at Zoopla, said: “While the national time to sell has barely moved, that stability is masking a real divide opening up between local markets.”
