Despite the economic boom in the UK, house prices continue to defy gravity by rising more than ever before. However, inflation appears to be slowing. For now, anyway.
The average UK house price rose to £278,000 in March 2022, a rise of £24,000 a year. The rate at which housing prices rose slowly for the third month in a row in June, although the housing market is showing more resilience than economists had feared. Since then, house price inflation has slowed but has been more stable than commentators had expected.
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Home Price Predictions in the 2020s
In May, real estate agent Knight Frank predicted that price growth would be around 5% this year, 1% in 2023, 2% annually in 2024 and 2025 and then 3% in 2026.
Building Society Nationwide says there are ‘signs of a gradual slowdown, with loan approvals returning to previous levels. A few months ago, real estate agents were saying that there was fierce competition among buyers, fighting like nails to get the desired property.
Now, many supporters have said that this has softened a bit. Instead, agents are receiving a ‘normal’ number of queries. Momentum seems to be slowing down, but the housing market was on fire a few months ago, so it’s hard to tell if it’s slowing down or returning to normal after the upheaval of the pandemic.
Truth: No One Knows What the Future Holds
Nationwide’s chief economist, Robert Gardner, said consumer confidence is already low, due to tighter finances due to rising prices and cost of living problems. However, the job market is strong. The unemployment rate is at its lowest level in 50 years, and the number of unemployed people is exceeding the number of unemployed people.
As the price crisis continues and interest rates rise, it seems unlikely to expect an impact on the housing market. Before the pandemic, the average monthly household income in the UK was £804. By the end of 2021, this figure was £915 and now stands at around £1,080. As a result, many experts believe that a decline in housing prices is inevitable, given the recent rise in housing prices.
Selling Behavior Is Changing Along With Buying Behavior
While buyers are no longer vying for homes, sellers are starting to sell out of desperation.
The Telegraph reported that landlords are rushing to put properties on the market, fearing their properties will lose value after the stock market crash. The number of household readings seems to increase gradually while the number of questions decreases. Most traders want to make the most of high prices before they go down.
It’s hard to tell if this is just panic, fueled by the chaos of the pandemic, or an early sign of things to come?
Among many things, housing prices are affected by supply and demand. For example, if sellers think that prices will fall, then they may rush to sell, so there will be more supply, and prices are expected to fall.
Tim Bannister, of Rightmove, said that he had recently seen “a slight slowdown in the market and a rise in property prices compared to last year’s exceptional levels, and we are now seeing signs of further pressures to reduce property.”