Hollywell Homes would like to wish you all a happy bank holiday weekend and with UK house prices published to possibly take a 5% decrease over the next two years, we thought the following update would be of interest to our subscribers. Happy reading!
Capital Economics (CE) is a leader in independent economic research and has recently downgraded its house price growth forecast for house price growth of 9% in 2022 to a new prediction of 3% drop in values in 2023. This reported decline is due to increased inflation and a significant rise in mortgage rates over the coming months.
CE estimated that the average mortgage rate, which as of today stands at 1.8% according to their current estimate, could double in 2023 to 3.6%. If they are correct, this could mean the highest inflation in mortgage rates since the 1990s.
CE said, “While the house price vs earnings ratio is more or less the same now as in 2007, we do not anticipate a return to pre-financial crisis mortgage rates of 6%, so the cost of mortgage repayments will remain much less of a burden.”
With Nationwide publishing data to support that house prices rose less than expected in April 2022 after expanding at the fastest pace in 18 years in March this year, this could be seen as a sign that the housing market is starting to slow its pace.
If you think a free property valuation with Hollywell Homes would help you to understand your current situation and give you information that assists in taking your next steps, please don’t hesitate to contact one of the team today on 01905 948848.
