A leading housing expert has claimed that property owners could witness the value of their homes dipping by more than £50,000 after Christmas.
With the Lloyds Bank Group forecasting a potential 18% fall in property prices next year, Jonathan Rolande, the founder of property firm House Buy Fast, believes that many regions could witness falls of that scale.
“An 18% fall would knock £54,000 off the price of an average UK property that’s currently £300,000. Will it happen? It might. There’s no doubt we are in a bad place right now. We have rising variable interest rates, and we are still dealing with the disastrous repercussions from the mini-budget that have pushed up long-term borrowing costs, inflation, sky-high food and fuel,” he said.
“Economies worldwide are feeling similar pain. And on top of that property prices here are at an all-time high with plenty of scope to fall.”
He said it was a perfect storm of events, making it easy to see why the Bank is predicting a large drop.
“But it’s not yet a done deal. Prices are sure to wobble, but some regions may just tough it out,” he added.
Rolande, who is also a spokesman for the National Association of Property Buyers, added: “In many places, there’s a genuine shortage of property, and this won’t go away if prices fall. People need to live somewhere, and they may need to rent, which will in turn push up sale prices as landlords feel secure buying an investment.”
He argued that interest rates are still lower than in previous dips, and that overseas investors are still keen to come here – even more so given the weakness of the pound recently.
“The Bank of England looks set to increase rates again and ironically this could help settle the markets and make borrowing a little cheaper, longer term,” Rolande continued, before stating the importance of strong leadership from No 10. “Rishi Sunak’s policies now are vital. They could, at least in the short to medium term, get things back on track. But more than ever we must assess the market on an almost weekly basis.!
He concluded: “Lloyds are quite right to plan for the worst, but there are also reasons to hope for the best. The weeks as we approach Christmas are going to be crucial as to what 2023 will deliver in terms of house prices.”
