Obvious lag between data and the state of the property market
19th October 2022 10:29
by Myron Jobson from interactive investor
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interactive investor's Myron Jobson comments on the latest ONS House Price Index.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “There is a clear and obvious lag between the latest official data on house prices and what is happening in the property market at present. More up-to-date house price indices paint a picture of a housing market that is running out steam, with rising mortgage rates and the escalating cost-of-living crisis cooling demand for homes.
“Soaring mortgage rates have become a particular pain point for those on the property ladder and those reaching for the first rung. Average mortgage interest rates are at the highest since the 2008 financial crisis, according to data from Moneyfacts. While U-turns in most of the policies announced in the ill-fated mini-budget were designed to calm the money market and ease pressure on mortgage rates, it may take some time before any benefit feeds through to consumers. The stamp duty cut does little to ease the plight for many first-time buyers as the benefit kicks in on purchases of homes valued at £400,000.
“For now, the housing market remains precarious for buyers. With further increases in interest rates seemingly around the corner and inflation set to rise again once the heightened energy price cap has filtered through, things could get worse before they get better when it comes to mortgage affordability.”
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