Housing market still showing hallmarks of a slowdown
21st December 2022 10:52
by Myron Jobson from interactive investor
Myron Jobson, senior personal finance analyst at interactive investor, comments on HMRC property transaction data.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The 4% month-on-month increase in property sales volumes in November does not mean that the housing market got a second wind following the mortgage market chaos in the fallout of the ill-fated mini-budget in late September. It takes months before sales are completed and as such, many transactions would have started before the infamous fiscal event.
“However, the housing market is still exhibiting the hallmarks of a slowdown as inflation concerns, rising mortgage rates, and an impending recession weigh on the property market. Mortgage lenders have reported a fall in new buyer enquiries in recent months, while recent Bank of England data shows the number of mortgage approvals for house purchases has waned.
“After a period of stratospheric growth, the burning question now is how low will house prices fall? Nationwide predicts house prices will fall by 5% next year as activity is expected to stabilise to just below pre-pandemic levels, while the Office for Budget Responsibility forecasts a 9% fall in the next two years. It could be some time before we see steep declines in house prices. The supply-and-demand imbalance isn’t going away, even though the red-hot housing market has cooled in recent months.”
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