What's Going Down In The Market?!

Hi! Steve here!

It was back in February when I wrote about Market updates, so I thought a follow up is needed.?

First of all, let’s revisit some predictions for house prices from the start of the year. We can revisit this at the end of the year to see how accurate they have been.?

Back in January 2023 this was stated:

We all know the first 9 months of 2022 in the housing market was remarkably strong, then came the mini budget. The realisation that the Bank of England would need to go faster and further to tackle inflation was very clear.?

Now that the Base rate has climbed on a consistent basis from 0.1% in December 2021 to 4.25% currently (next review meeting is 11th May) but many predict a settling around 4.5%, coupled with the rising cost of living, what has the impact actually been and are the predictions for the rest of the year still the same?

So far in 2023, according to the Nationwide House Price Index, house prices in January saw a fall of - 0.6%, February – 0.5% and March - 0.8% which is -1.9% over the first quarter.?

This has been characterised by a partial recovery in activity and transactions, especially when compared to the significant drops seen at the end of last year, with the latest Bank of England data showing mortgage approvals rising for the first time in six months. This is largely because mortgage rates have begun to ease, despite the BoE’s rate hikes, as future interest rate rises have been priced into current deals.?

Although record high rents are making it hard for First Time Buyers (FTB) to save for a deposit, FTB type properties reached a new record price of ￡224,963 in April and buyer demand is 11% higher than it was in this period in 2019, which “illustrates the continued strong desire from would-be first-time buyers to own their own home”, said Rightmove.?

And according to Moneyweek.com the Office for Budget Responsibility (OBR) published a fresh forecast for the property market alongside the Spring Budget – saying it estimated prices would fall further than previously expected. The OBR now expects house prices to fall 10% by 2024. Lloyds and Halifax expect house prices to fall 8% in 2023, while Nationwide and online estate agent Zoopla are predicting falls of 5%.?

Let’s remember though that property values may fall in very stretched areas, and for other areas, prices may not change very much, if at all.?

So as the Base Rate stabilises and maybe even comes down towards the end of the year it will be interesting to see if we end up on a 5% fall, 10% fall or somewhere in the middle.

We all know that a larger than average increase was seen post pandemic and so what we are seeing now is more of a correction than a significant fall.

Have a great week... another long weekend is on the horizon so if you're unable to speak to a member of our team due to the bank holiday, you can?get in touch with the team here?and we will get back to you as soon as possible.

Steve

Express Mortgages is a trade name of Express Mortgage Services Ltd. Express Mortgage Services Ltd is authorised and regulated by the Financial Conduct Authority. [Reg No: 474427] Company registered in England & Wales no. 05167662

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