07 February 2022
If you are covering the Halifax house price index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"Any predictions that house prices were going to start to pull back once the stamp duty holiday was no longer in play have been proved very wrong. However, the Halifax house price index released today shows that significant house price rises are starting to slow with only a 0.3% month on month rise, which is the lowest since June 2021.
"While forecasts of a housing price reduction have not yet fully materialised it seems inevitable that there will be some sort of slowdown in the coming year. With energy prices soaring, inflation running riot and interest rates likely to rise in the very near future people are going to start to feel less financially stable than they were before, and this will translate into fewer property purchases. House price growth continues to far outstrip wage growth and now with a cost-of-living crisis looming the run of ever-increasing property prices is simply unstainable.
"Another force on the property market that remains very unpredictable is how businesses will react to the dropping of all office restrictions. While many businesses feel the pandemic has caused an permanent change in how we work, others will mandate a stricter office return. This may reverse the trend that has seen city centre flats become less desirable compared to more rural detached houses. How we exit the pandemic and the behaviours we all adopt will exert pressure on different sections of the property market.
"However, while a slowdown in the medium term is likely, a huge drop in property prices is probably not on the cards unless something completely unforeseen happens. At present the UK is still suffering from a lack of housing stock and the laws of supply and demand will keep house prices relatively high for the time being. The last couple of years have been anything but predictable and this will continue into 2022."
