Sharp decline in house prices grips England and Wales

Sharp decline in house prices grips England and Wales

0:01 AM, 18th October 2023, About 9 months ago

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House prices in England and Wales have fallen at their fastest pace since 2009, according to new research.

The e.surv house price index reveals that house prices have fallen by more than £1,100, the fourth largest monthly fall of 2023.

The chartered surveyor company says the house price falls are down to higher mortgage costs.

Increasing competition in the mortgage market

Richard Sexton, director at e.surv, said: “The fall in UK house prices is largely down to the higher cost of mortgage finance plus the squeeze on disposable incomes from the higher cost of living.

“Across the UK’s biggest lenders, the average mortgage rate for a 5-year fix with a 75% loan-to-value ratio (LTV) currently sits at 5.1%, the lowest since July 2023, according to the Bank of England.”

Mr Sexton added that a pause in interest rates may see some buyers return to the market.

He continued: “The pause in base rate hikes and increasing competition in the mortgage market may see a return of some buyers who delayed their home moving decisions earlier in the year now returning to the market.

“However, many other buyers are still waiting for mortgage rates to come down further and for the right property to become available.

“This suggests that there is a pent-up demand for housing that could be released in the coming months if market conditions continue to improve.”

Restimulate the market

Mr Sexton reveals house prices in the North have remained steady.

He said: “Regionally, Yorkshire and Humber and the East Midlands continue to perform relatively well with house prices maintaining steady growth and outpacing other regions of the UK.

“The South West saw the biggest fall in annual house prices, of 2.4% more than July of this year.”

Mr Sexton says the Chancellor’s Autumn statement could help provide support for home owners.

He said: “Expectations as to how much the market might unwind vary, but no one is suggesting a market collapse.

“Indeed, given the evident importance of housing issues in the current pre-election policy jostling, it is clear there may well be attempts to restimulate the market in the Chancellor’s Autumn Statement on 22nd November.

“This could take the form of tax assistance, as well as a new affordable home ownership policy.”

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