Could The Housing Market Be On The Turn?
The housing market across the UK has been defying gravity over the past year, with prices soaring despite the growing pressures on potential buyers coming from the high rate of inflation and increases in interest rates.
In recent months many commentators have been looking for the moment when they could see the property market peaking, especially with the Bank of England forecasting a recession. For those seeking properties for sale in Hackney, this has taken place at a time when London has continued to see lower growth than the national average.
An organisation that does believe the market is on the brink of change is the Centre for Economics and Business Research (CEBR). It has predicted a fall of 4.5 per cent in 2023, peaking at 6.2 per cent in the third quarter before recovering some ground at the back end of the year.
The CEBR cautioned against the notion that this would help improve affordability for young first-time buyers, arguing that this dip in prices would be taking place during an economic downturn at a time when interest rates had been increasing. Moreover, it predicted, mortgage lenders will respond to the situation the way they always do, by reducing loan-to-value ratios on home loans.
Now may certainly be a good time to see what bargains are available in the Hackney market, given the affordability issues that the CEBR highlighted.
Indeed, the report came out before the September meeting of the Bank of England’s Monetary Policy Committee, which decided to raise the base rate by 0.5 per cent for the second meeting running.
At 2.25 per cent, the base rate is now at a 14-year high, which is still modest by historic standards but high for those used to paying mortgages linked to a base rate of less than one per cent, which was the case from early 2009 until earlier this year.