Enable’s IFAs in Bishop’s Stortford are constantly being asked what’s happening with house prices. Whether you are buying or selling predicting house prices is notoriously difficult. Recently one of the UK’s largest mortgage lenders has dismissed fears that the UK housing market is heading for a crash.
There has been much in the news recently of the biggest monthly drop in prices since shortly after David Cameron became PM in 2010. Traditionally April marks the start of the spring house-buying season, but the Halifax reported that house prices were down 3.1%.
This fall had followed a 1.6% rise in March but overall house prices dipped across the UK for the third quarter in a row, according to the Halifax falling 0.1% between February and April. This compares with declines of 0.1% and 0.7% in the two previous two quarters. The lender said both the quarterly and annual rates had fallen since reaching a peak last autumn.
Russell Galley, Halifax’s managing director, has said demand for property had been weak in recent months. He still expects however that annual house price inflation to be between zero and 3% over the course of this year.
Previously sustained falls in house prices have tended to occur only when rising unemployment forces people to sell their homes and move. At the moment says Galley says the UK jobs’ market is still pretty strong. Recent reports suggest that unemployment is at its lowest level since 1975 and real wage growth has resumed.
“Looking ahead, consumers’ low confidence and modest rises in mortgage rates suggest that demand will continue to weaken.” says Samuel Tombs, the chief UK economist at Pantheon Macroeconomics but “prices will fall rapidly, though, only when a large proportion of homeowners are forced to sell up. With unemployment and borrowing costs low and credit freely available, few people are being forced to sell their homes.”
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If you are looking for financial planning to support your house buying Enable’s IFA’s in Bishop’s Stortford are here to help.