UK house prices: Warning over 'sensitive' market with fresh turbulence in just weeks
For Sale signs displayed outside houses in Finsbury Park, North London.
PA
The housing market remains “sensitive” as a major development could bring fresh turbulence in just a few weeks, an expert has suggested.
Richard Donnell, the executive director of research at Zoopla, warned that rising mortgage rates and the wider economic outlook could have a profound impact on the housing market.
He said: “Sellers shouldn’t get carried away by more positive data on the housing market and need to price their homes realistically if they are serious about moving home in 2023.
“Homebuyers remain price sensitive with one eye firmly on the outlook for the economy, the cost of living and the trajectory of mortgage rates, which appear likely to edge higher in the coming weeks.”
Richard Donnell, the executive director of research at Zoopla, warned that rising mortgage rates and the wider economic outlook could have a profound impact on the housing market
PA
Mortgage costs have been rising as higher than expected inflation figures force the Bank of England to keep hiking interest rates.
The inflation rate in the United Kingdom dipped to 8.7 per cent in April, down from 10.1 per cent in March.
However, the figure remains at a 31-year-high for April and could lead to the Bank of England raising interest rates to nearly five per cent.
An increase, likely up by 0.25 per cent to 4.75 per cent, would mark the Bank’s 13th consecutive hike.
An increase, likely up by 0.25 per cent to 4.75 per cent, would mark the Bank’s 13th consecutive hike
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The base interest rate was as low as 0.1 per cent in late 2020 and early 2021.
The figure steadily rose with increments of 0.25 per cent to 4.25 per cent in March.
However, Prime Minister Rishi Sunak has staked his premiership on curbing inflation.
Sunak outlined halving inflation to around five per cent as his number one objective when he unveiled his top five priorities earlier this year.
A general view of houses in south London, as London has been the most searched-for area among Britain's home buyers in 2022
PA
Despite Donnell’s pessimistic prediction, Zoopla also revealed that more prospective house sellers are returning to the UK’s property market.
The development has pushed agreed home sales to their highest point on the year.
House prices have also fallen by 1.3 per cent nationally over the past six months.
However, the speed of price falls has been steadily decreasing as buyer confidence slowly starts to improve.