What does the future hold for the property market?
Those considering a house move in the next 12 months may be feeling a little concerned about recent trends in the property market. Rising interest rates are making borrowing more expensive, and creating more challenges for those wanting to move, but are these trends likely to continue? Danny Luke from property company Quick Move Now gives us his property market predictions for the coming year.
Property price growth will slow as interest rates and cost of living rise further
The growth we’ve seen in property prices over the last two years looks set to come to an end as the public deal with further increases in the cost of living. Depending on how high inflation and interest rates go, we can expect to see a slow in price growth and potentially even a fall in property prices.
Material costs and shortages will continue to impact the building of new homes
Rising material costs and supply chain issues have had a big impact on the property market over the last couple of years. Brexit, the coronavirus pandemic and the Russia-Ukraine war have all contributed to these challenges, and they look set to impact the market for some time to come. This will affect the building of new homes and homeowner renovations.
Lending will become more difficult
Rising interest rates are making mortgage affordability increasingly difficult for many people. With interest rates and inflation continuing to rise, we can expect lenders to become more cautious.
This will impact those hoping to buy their first home and those wanting to move up the property ladder. With a smaller pool of potential buyers, we can expect to see property prices cool further.
Danny says: “It was always clear that the level of growth we’ve seen over the last couple of years was not going to be sustainable long term. The market was overheated and needed to stabilise, but many were hoping that another recession could be avoided. Sadly, it doesn’t look like that will be the case as an increasing number of economists suggest that recession is now inevitable.
“Although the predictions for the next 12 months are very challenging, it is important to say that we’re not expecting the next dip to be as severe as the one we saw in the mid-2000s, and we are confident that, in time, the economy and market will be able to bounce back. In the meantime, it’s a case of sitting tight and being wise with the financial commitments you make.”
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