07 July 2023
If you are covering the Halifax House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"House prices have seen yet another modest drop of 0.1%, according to Halifax this morning. Given the huge squeeze on affordability at the moment this is likely to be sign of things to come but it's worth remembering that the housing market despite everything that has been thrown at it over the past few years has remained resilient. However, the economic storm currently battering Britain seems like an insurmountable hurdle and downward pressure on house prices is inevitable.
"With two year fixed rate mortgages now well above 6%, people’s ability to continue to service their mortgage will be called into question and also first time buyer’s desire to jump into paying such a high monthly rate will also be tested. This could create an environment where those who have overstretched themselves look to offload their properties at a time where there is a dearth of demand.
"That said, the recent Mortgage Charter, which is designed to help homeowners struggling with their loan repayments, will give homeowners a bit of breathing space meaning there should only be a trickle of distressed homeowners being forced to sell up rather than a flood.
"The past few weeks have represented a very turbulent time for the mortgage market however we are starting to see a semblance of normality resume as lenders slow down the readjustment of their rates. Any further shocks will once again push rates up higher and this could cause significant damage to property prices as affordability is once again squeezed. The general picture of the housing market at the moment is one of unpredictability and anyone coming to the end of their deal or who want to buy in the short term should seek mortgage advice as soon as possible to lock in a deal because it is anyone’s guess where things might go from here."
