The Bank of England has advised that the UK will slump into #recession later this year, let’s see how it will affect the property market.
Since the “Covid affaire”, this will be the first UK recession and this time, the property market could face a different outcome. During the pandemic, the housing market was boosted and prices increased, encouraged by the “stamp duty holiday” and by people needing more space because of the need to work from home.
The latest figures from Halifax bank, published recently, showed that house prices climbed 11.8% in the past 12 months. However, house prices slipped by 0.1% in July just before the Bank of England raised interest rates to 1.75% to tackle soaring inflation.
“While we shouldn’t read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time”, said Halifax managing director Russell Galley. Repossessions may increase as people struggle to pay for the increased cost of living and mortgage payments to make more stock available.
A recession could help some people to climb onto the property ladder if, as a reflection of the recession, we will register a decrease in prices. Let’s think about the chance of getting a smaller deposit and a lower amount to borrow that can work even with the rising mortgage rates.
This change will be in conflict with the inflation that is set to climb even higher this year with more pressure on savings. If property prices fall, it could be good news for potential homebuyers. The actual risk is for a potential seller who will have to accept lower offers in order to move on. Keeping a property for a few years has historically helped people get out of the occasional dips in the market. The last time that the property market slumped was after the financial crisis in 2008, after that the average prices recovered after only 2 years.
We think that in the next 12 months we will face a buyers’ market and an expert guide through the buying process will help homebuyers to close some good deals.
Contact Us today to discover our #propertyfinder service and how #WelcHomeInternational can assist you during this market.
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