The possibility of fewer interest rate cuts than we expect, or even rate hikes, and the possible hit to the economy from the surge in energy prices due to the conflict in the Middle East risks derailing the strengthening in the housing market we forecast this year. While we think the probability is low, without any offsetting borrower behaviour such as extending mortgage terms or borrowing more, the rise in mortgage rates consistent with our worst-case scenario could lead to house prices falling by around 15%.
We’re hosting an in-person property roundtable event at our London office on 18th March to discuss the housing and commercial property winners and losers. (Register here.)
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