7 September 2022
If you are covering the Halifax House Price Index, please see the following comment from Karen Noye, mortgage expert at Quilter:
"As the country sees new prime minister Liz Truss inhabit prime real estate in central London, first time buyers now grapple with an average house price that is just shy of £300,000, according to latest Halifax data.
"While the market has certainly shown signs that it is slowing in recent months, its rampant last couple of years still mean that the Halifax House Price Index now shows that prices have grown by 11.5% in just one year.
"The housing market has shown resilience in the face of one of the worst cost of living crisis many will have ever experienced. However, with inflation still soaring and the Bank of England likely planning further base rate hikes cracks may already be starting to appear.
"On top of this, soaring energy prices will naturally make buyers more cautious, which could lead to inertia and the adoption of a wait and see approach. Any stagnation in the market will lead to a cooling and then if the winter proves to be as difficult as predicated and there is an uptick in unemployment then more repossessions could then create a situation where there is more supply than demand. After years of cheap mortgage deals people may also be forced to move to cheaper properties as remortgaging on their current property is deemed too expensive.
"Whether this translates into a meaningful drop in house prices is yet to be seen but first-time buyers are likely to still be priced out of a market which has got further and further out of reach since the pandemic started. Although the plight of first-time buyers will not be lost on incoming PM Truss she may feel that she has bigger fish to fry in the short term and kick any meaningful reforms to the housing market down the road and concentrate on the pressing energy crisis."
