According to Savills, home prices could fall by 10% next year, according to real estate experts.
The amount that house prices can drop will vary by region – some see prices as 12.5% lower.
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Savills however expects home prices will rise by 6% in nominal terms over five years.
London’s house prices are expected to drop by 12.5% next year.
The North West, York, Humber and North East will experience the lowest rate for property prices – a drop of 8.5%.
The temporary drop in home prices is being blamed by the real estate agent. This is due to rising interest rates and the current cost of living crisis.
Interest rates are 3%.In an effort to reduce inflation, the Bank of England raised its base rate by 75 basis points on Thursday (November 3).
Upload interest ratesIt encourages people to save rather than spend which, in theory, is supposed to help curb rampant inflation.
The Bank of England expects that inflationIt will peak at 11% on October and then stay above 10% for several months.
However, raising the base interest rate will increase the cost of borrowing. loansThen there is the credit cardsAnd the MortgageInstallments are more costly.
Then there’s the Stamp Fee DiscountsThen there’s the housing shortageto rise interest ratesAnd the High mortgage borrowing costsIt is likely to cause “downward pressure” on the home prices in coming months.
Lucien Cook, head of residential research at Savills, said: “The new prime minister and shifts in fiscal policy appear to have relieved some pressure on interest rates, but affordability will continue to come under real pressure as the impact of higher interest rates feeds into buyers’ budgets.
“This, combined with significant cost-of-living pressures, means that we expect to see prices drop by up to 10% next year during a period of much contraction in the housing market.”
The news comes next house prices By 0.9% in OctoberFigures from Nationwide
The annual rate of price growth in homes also slowed to 7.2% from 9.5% in September.
A Typical UK property The cost is now £268.282, according to Nationwide – £3,977 down from September when the average price was £272,259.
However, experts have since softened their home prices forecasts as the turmoil subsided.
It’s important to remember that the home-price forecast is only a guideline and that no one can predict what will happen.
Experts in this field, including Coreco’s Nick Morey say that, given the UK’s low housing supply, there must be a prediction of a collapse in house price. with a little salt.
Ben Thompson, Mortgage Consultants Previously said the sun: “The most likely scenario as things stand today, is that demand declines from current levels and we are already seeing stabilization in house prices From now on, the single number will likely reappear on and off for a few months.”
“The prospect of a price decline is not as terrifying as it seems if we remember that prices have inflated about 20% over the past two years,” said Nathan Emerson, CEO of Property Mark.
Savills’ research shows that house prices will begin to recover as early as 2024, especially since the Bank of England has confirmed that next year’s base rate will be 4.5% instead of 5%.
Savills said that by 2027, the median home price would be £381,578 – £22,290 more than it is now.
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