5 August 2022
If you are covering the latest Halifax House Price Index, please find below a comment from Karen Noye, mortgage expert at Quilter:
“For the first time in 13 months, house prices have failed to rise month on month. With the Bank of England base rate now at 1.75% and jumping ever higher, this may now be the beginning of a trend where house prices show some weakness.
“According to this morning’s Halifax house price index, the much-anticipated reversal of house prices may have just begun to materialise with a small decline of 0.1%. This is down from a 1.8% rise in June, representing a considerable slowdown during the summer month. Quarterly and annual changes remain high, however, and the average house price in the UK sits at an incredible £293,221.
“The pandemic put the housing market into overdrive after the flurry of activity which was at that point based on a change in working habits, the race for space, the stamp duty holiday and ultra-low interest rates. Now that the restrictions of the pandemic have eased and working habits have bedded in people’s immediate desire to move has abated. Similarly, the stamp duty holiday has been finished for some time now and interest rates are skyrocketing meaning cheap mortgage deals are a thing of the past.
“All these factors or more importantly a lack of these factors will reduce demand. Repossessions may increase as people struggle to pay for the increased cost of living and mortgage payments and therefore more stock may find its way onto the market. A lack of demand and an increase of stock will have the natural effect of pushing down prices.
“The autumn and winter could prove to be the tipping point for many as they struggle with increased bills and opt to move to smaller accommodation.”
