Santander predicts a 10% house price fall this year

Santander predicts a 10% house price fall this year

10:13 AM, 6th February 2023, About A year ago 2

Text Size

Santander is predicting a 10% drop in UK house prices this year – and they could return to 2021 levels. 

According to the bank, the economic outlook for 2023 remains ‘serious’ with ‘stubbornly high inflation’.

And, along with high household utility bills, rising interest rates and a likely recession, means a decline in house prices is inevitable.

Santander said mortgage borrower arrears remained low so far, but it saw a small number of business customers defaulting towards the end of last year.

Mortgage rise by an average of £313 per month

The lender also reports that around 400,000 of its customers will soon see their fixed-rate mortgages come to an end – and they will see their mortgage rise by an average of £313 per month.

In addition, the bank has seen energy costs for about 900,000 of its clients double year-on-year.

During 2021, net mortgage lending for Santander was £7.5bn and this rose to 9.8bn in 2022.

However, there was a ‘marked slowdown’ in demand for new loans in the final three months of last year.

‘2022 saw a marked slowdown in mortgage lending’

A Santander spokesperson said: “The end of 2022 saw a marked slowdown in mortgage lending and, with an uncertain economic outlook for 2023, we will continue to focus on a prudent approach to risk while we help people and businesses prosper.”

The bank is also predicting further base rate increases and ‘household credit quality’ could be hit as the economy struggles.

The spokesperson added: “We expect house prices to fall back to 2021 levels over the year ahead as higher base rates dampen demand.

“The outlook remains uncertain as inflation has eroded real disposable income with the prospects of a recession ahead.”

Share This Article


John Grefe

12:59 PM, 6th February 2023, About A year ago

Why worry? If you are a serious investor in rentals you ought to know that it's a medium to long term business

Reluctant Landlord

13:17 PM, 6th February 2023, About A year ago

if you don't have to sell its not an issue.

If you let it means tenants will probably stay put as there is nowhere for them to upgrade to (if they want more room) at a price they can afford.

If a tenant does leave (downgrades/moves back to mum and dad or goes into a property share) then you can probably rent for more, due to supply and demand.

Even if house prices fall those that are not cash buyers will be hesitant to buy as interest rates due to increase anyway again over the next year.

The result is basically stagnation, although the real affect will still be high rental prices as rental supply is still below demand regardless.

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now