Almost a third of prospective buyers surveyed stated that they have reduced their budgets in response to rising living costs
The cost of living crisis continues to spiral with latest research from estate agent Savills reporting homebuyers cutting budgets in some areas of the market.
Almost a third (29%) of prospective buyers surveyed stated that they have reduced their budgets in response to rising living costs. The impact is felt more for those more reliant on borrowing – including half (50%) of first-time buyers and 44% of those who are looking to upsize.
Downsizers are the least impacted, with two-thirds (66%) keeping both their budget and funding the same, and those moving outside of London (59%).
Frances McDonald, research analyst at Savills, says: Despite transactions remaining robust over the summer months, there’s now certainly less urgency in the market, with rising costs of debt impinging on the budgets of those most reliant on a mortgage. Increased costs of living are also making buyers much more conscious when it comes to how much they are willing to spend.
McDonalds adds that in the short term the market will be predominately driven by homeowner need, rather than lifestyle influences which drove the market during the pandemic – especially now that lockdowns are fading into distant memory.
She adds: After more than two years of runaway house price growth, sellers will need to become much more realistic when it comes to pricing their home, especially as more stock comes onto the market.
She says: As and when inflation has been tamed, the cost of debt eases and we see a pick-up in both domestic and global economic growth, we can expect price growth to return to these markets, particularly given the strength of buyers’ underlying commitment to move over the medium term.