As we prepare for a recession in the UK, many estate agents have stated a surge in buying and selling of properties in the housing market. This could be a result of people trying to shift homes before the interest rates go up.
Here is the latest forecast that caught our eye on the house price changes for the year 2022. Our estate agents in Doncaster will keep you updated regarding the key developments in the UK property market by closely observing the prominent and dominant indicators.
Can we expect house prices to fall this year?
According to the latest house price index from the property portal Rightmove, reported a fall in house prices to £365,173 in August, decreasing the property value by 1.3%, or £4,795.
Halifax, one of Britain’s leading mortgage lenders also stated the annual rate of house price growth has decreased to 11.5%. Further corroborating a slowdown in the housing market, Barratt, the country’s finest house builders, claimed that the number of houses booked had fallen below the level of the previous year and was currently even lower than before the pandemic. High macroeconomic ambiguity might partially be the reason.
The Bank of England warned in September it may raise interest rates for the sixth time in a row after the government’s mini-budget. This has caused mortgage providers to pull deals and raise rates, thereby increasing the cost of mortgages across the board. In turn, leading to reduced demand for houses and consequently lower house prices.
Higher petrol and energy prices with rising inflation and taxes and a cost of living crisis are all detracting from the extraordinary surge in housing demand witnessed in recent years.
The imbalance in buyer demand has also declined compared to last year, but it is still sufficient to prevent major financial retribution. Autumn is usually a busy time for the housing market, as potential price increases are anticipated as people try to move before the new year.
What to expect in the upcoming years?
As per property experts, UK house prices are likely to see a decrease by at least 10% next year as mortgage providers withdraw deals and increase interest payments to amounts not seen since before the 2008 financial crisis. Most experts, however, expect the housing market to slow, rather than crash, as unemployment is the lowest in almost 50 years, at 3.6%, and is only expected to start rising in mid-2023.