20 September 2023
If you are covering the UK House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"The UK government’s latest house price data bucks the trend of other indices and shows that house prices have managed to rise modestly despite the economic pressure from higher interest rates. In July, average house prices have risen 0.5% since June 202.
"Despite this increase, the UK housing market's future remains uncertain, while inflation continues to drop it is still the consensus that rates will once again increase on Thursday although this might mark a peak of interest rate increases or at least a pause in hikes. However, it looks likely that rates will stay elevated for longer.
"Persistently high rates will pile continuous pressure on those with mortgages and force some to sell up. While these rates can help manage inflation and ensure economic steadiness, they can cause people to spiral into further debt as they fall into arrears.
"A more stable interest rate environment, even if high, can bring some predictability. For aspiring homeowners, notably first-timers, this can be invaluable. A more stable mortgage rate landscape can help these buyers budget better and not have to deal with unpredictable rate spikes that can disrupt financial plans.
"However, house price data always lag the reality of the situation here and now and we may see that increased rates are having a disruptive impact on the market and prices will start to decrease in future months."
