A house price crash can be averted if the Bank of England resists further interest rate hikes, according to Jonathan Rolande of the National Association of Property Buyers (NAPB).
It has been predicted that house prices could fall by as much as 30% this year if mortgage rates fail to drop. However, Rolande believes that what happens next will depend largely on the Bank of England.
He said: “We really are at a pivotal moment. For those with any kind of debt the rise and rise of rates, courtesy of the Bank of England, has chipped away at disposable income.”
“We have all seen the shocking effect of inflation for ourselves whenever we go to the shops or switch on the heating. And these rate rises, combined with higher prices, are now really taking effect.”
Rolande added: “House prices have begun to slip away from their eye watering peak, and there is a sense that the worst of inflation is now behind us.
“We can only hope those at The Bank of England feel the same way and spare homeowners from more rate rises. If they don’t we risk seeing prices fall even more in the future.”
Rolande also believes the market is still suffering the effects of last autumn’s disastrous mini budget. “The housing market is still badly reeling from Liz Truss,” he said.
According to the NAPB, London has suffered the highest increase in mortgage bills across the UK, with average monthly repayments rising by £490 per month. The South East has had the second-biggest increase in mortgage costs. In comparison, Scotland has experienced smaller average monthly mortgage cost rises of £169.
Comments (2)
Perhaps when I was 10 years younger I would have been naive enough to think house prices needed to be rescued above all else. After all I was financially motivated to think that way to provide for my family. But I think now above all else the economy needs to be rescued. I have been able to house my children and honestly this game isn’t what it was. Back when I started it was people with a bit of knowledge and willing to work hard making run down properties in to homes but now I dispair at the modern day “property professional” who farm it all out to an agent and expect the work all done for them.
Interest rate hike is damaging to economy. But desperate times need desperate measures. To control inflation, BOE has to increase interest rates. If one of the consequences is house price falls, let that be. Need to see a bigger picture. Rather than focused on one industry and suggest something. Inflation is high because of cheaper interest rates for over a decade that is the reason for skyrocketting house prices. Young already can’t afford to buy a place. Please write articles with a wider view of impact.