House price crash warning: ‘Juggernaut sharply slowing’ as ‘frenzied market’ to collapse
BRITAIN’S housing market has been branded a “juggernaut sharply slowing” by an expert as prices falling amid inflation lead to fears of a crash.
07:00, Sat, Aug 20, 2022
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Experts have told Express.co.uk the housing market is beginning to feel the bite of the cost-of-living crisis. Prices have fallen for the first month on record according to Rightmove and Halifax. Rightmove held the average price of a UK property dropped by 1.3 percent, or £4,795, to £365,173 in August. The Halifax House Price Index held house prices fell by 0.1 percent in July, for a £365 month-on-month fall.
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While average wages rose 4.7 percent between April and June, the Office for National Statistics (ONS) added the “real value” of pay fell by 3 percent.
Average rates on a two-year and five-year fixed mortgage were up by 0.4 and 0.52 percent respectively in July, according to the research company Moneyfacts.
Inflation also hit a 40-year high of 10.1 percent annually, according to ONS estimates on Wednesday, above a consensus forecast of 9.8 percent and up from 9.4 percent in June.
The Bank of England expects inflation to top out at 13.3 percent in October, while energy bills are set to surge up to £3,523 on October 1 according to Investec.
As a result of surges in the average cost of living and mortgage rates, as well as plunges in “real value” wages, house price growth slowed from 12.8 percent to 7.8 percent between May and June, in one of the biggest monthly drops in annual growth ever recorded by the ONS.
Jonathan Hopper, CEO of Garrington Property Finders, has now told Express.co.uk that the “juggernaut of rising house prices is slowing sharply”.
UK’s housing market has been branded a ‘juggernaut sharply slowing’ (Image: GETTY)
Prices have fallen for the first month on record according to Rightmove and Halifax (Image: EXPRESS)
Mr Hopper told Express.co.uk: “The average price paid for a home rose by 1 percent between May and June.
While this is a solid jump, and the eighth consecutive monthly increase in values, it’s a fraction of the 5.7 percent spike seen in June 2021.
“This comparison with the explosive growth seen a year ago goes some way to explaining why today’s headline figure looks rather flat.
- “But the slowdown is no statistical anomaly. Economic gravity is finally catching up with the once superheated property market.”
Jonathan Hopper said ‘economic gravity is catching up with the superheated property market’ (Image: GETTY)
The ‘frenzied market’ has ‘transitioned to sellers wanting ‘top buyers’’ (Image: GETTY)
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The Garrington Property Finders CEO continued: “Rather than slipping into its customary summer holiday lull, in recent months the property market has been shocked into action by the gathering recessionary clouds, and it has been ‘all change’ for both buyers and sellers.
“With consumer inflation now at a 40-year high and Britons’ real-terms earnings falling at the fastest rate on record, confidence is starting to wane – and this is rapidly redrawing the familiar patterns of the post-pandemic boom.
“Sellers have become much more flexible in their pricing, with many keen to agree a deal quickly ahead of a potential softening of the market.
“Meanwhile buyers are being far more measured in their approach to negotiation, which increasingly means seeking a discount to serve as a comfort buffer to offset unknown risks.
Charlie Huggins said ‘increasing prices in recent years mean home buyers borrow more’ (Image: GETTY)