Modest rate hikes won’t prevent house price gains

We doubt that a larger rise in Bank Rate over the next two years than we previously expected will put much upward pressure on mortgage rates. Low interest rates and increased spending on housing costs will continue to provide a supportive environment for house price valuations. So we retain our above-consensus view that house prices will rise by a further 5% in 2022.
Andrew Wishart Property Economist
Continue reading

More from UK Housing

UK Housing Market Update

Where is all the stock?

Estate agents undoubtedly have a very limited number of homes on the books. But the idea that the lack of supply is due to few homes being put up for sale is a misconception. High numbers of transactions inevitably mean that listings are higher than usual, but they are being outstripped by even stronger demand as large numbers of first-time buyers look for homes.

24 November 2021

UK Housing Market Chart Book

Little sign of momentum in prices abating

The end of the stamp duty holiday has had remarkably little impact on buyer demand. If anything, the imbalance between strong home purchase demand and limited supply is intensifying. Indeed, Rightmove reported that the average time to sell a home continued to drop in October. That’s consistent with strong competition between buyers bidding up prices further in the near term, although in London these pressures appear to be weaker.

19 November 2021

UK Housing Market Update

Increase in mortgage rates to be limited

Anticipation of higher interest rates has pushed up fixed mortgage rates. And with scope for banks to absorb higher costs in their margins now exhausted, future changes in interest rate expectations will be fully passed through to mortgage rates. But as we think the forthcoming rise in interest rates is already priced in, we are not expecting mortgage rates to jump much higher.

12 November 2021

More from Andrew Wishart

UK Housing Market Data Response

Nationwide House Prices (Sep.)

The only small gain in house prices in September suggests that house price growth slowed as the stamp duty holiday was withdrawn. But with inventory limited and demand resilient, we suspect that house price growth will cool gradually rather than collapse.

30 September 2021

UK Housing Market Data Response

Mortgage Lending (Aug.)

While still above pre-COVID-19 levels mortgage approvals edged down in August, suggesting no great rush to move before the stamp duty holiday taper ends at the end of September. But an increase in the size of mortgages approved indicates that the end of the tax break may only be a small drag on demand.

29 September 2021

UK Housing Market Update

Can large deposits continue to support house prices?

A jump in deposit sizes has been a key driver of the rise in house prices over the past 18 months. While saving is now dropping back, households have built up a large stock of cash assets which will prevent a rapid reversal in deposit size. While not providing any additional boost to house prices, that will help support them at their current level.

27 September 2021
↑ Back to top