House prices in the UK could plummet up to 40 per cent as buyers and sellers vanish due to uncertainty plaguing the market.
Buyers are hesitant to put money into a market that is still falling and mortgage rates are not good enough to tempt them to take the jump.
Sellers are also holding firm as they refuse to settle for low offers as their properties continue to spiral down in price.
Buyers are hesitant to put money into a market that is still falling
Tim Goode
As a result, the market has slowly ground to a halt as neither party is willing to compromise.
And it would appear it is unlikely to move any time soon as the market adjusts to higher interest rates.
January saw 0.0 per cent house price growth, there was a decrease of 1.3 per cent in December and 2.4 per cent in November.
Higher borrowing costs will inevitably lead to a drop in demand.
Experts have warned that the UK could see a repeat of the 1990s, where house prices shot down.
January marked the ninth negative monthly reading in a row for new buyer inquiries.
Over the next year a net balance of 20 per cent of surveyors expect to see house sales fall rather than rise.
This marks an improvement compared with a balance of 42 per cent expecting sales to fall in the next 12 months in December.
20 per cent of surveyors expect to see house sales fall rather than rise.
Dominic Lipinski
Chief economist at RicsPrices, Simon Rubinsohn, said: “Prices are now beginning to reflect the shift in balance between demand and supply.
“However, it is questionable how much downside to pricing there is likely to be given that recent macro forecasts from the Bank of England and others are now envisaging a less harsh economic environment this year.
Last week, Halifax revealed that the average house price is more than £12,000 below the peak seen in August last year.
But Santander have offered a more optimistic outlook, predicting that house prices will only drop by 10 per cent this year.
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