UK HOUSE PRICES TO FALL 10% THIS YEAR

UK house prices will fall by up to 10% this year, as higher mortgage rates and the broader cost of living crisis cut home buying says Lloyds Bank, CEO Charlie Nunn.

The British housing market has been under pressure following former Prime Minister Liz Truss’ disastrous “mini-budget” in September, which prompted lenders to withdraw around 40% of all mortgage products from the UK market amid concerns over spiking interest rates.?

The UK property sector remained sluggish in recent months, as the Bank of England continued to hike interest rates aggressively in order to reel in double-digit inflation. It projected that the country was entering its longest recession on record.??

Inflation hit 10.7% in November, and the Bank has hiked rates at nine consecutive policy meetings to lift its main rate from 0.1% to 3.5%. Further increases are expected in the coming months.

A report from a British property website showed asking prices for homes rising slightly in January for the first time in two months.?

“Our base case for 2023 is we will have a recession a mild recession GDP of about -0.1% this year, unemployment staying strong and that’s more because of the constraints on the supply side, interest rates about 4% and a recovery coming into 2023,” Nunn said.