Property owners could see more than £50,000 wiped off the value of their home after Christmas, a leading housing expert has warned.
The Lloyds Bank Group has forecast a potential 18% drop in property prices next year.
Jonathan Rolande, the founder of property firm House Buy Fast, agrees that many regions could witness falls in that scale.
“An 18 per cent fall would knock £54,000 off the price of an average UK property that’s currently £300,000. Will it happen? It might. There’s no doubt we are in a bad place right now. We have rising variable interest rates, and we are still dealing with
“the disastrous repercussions from the mini-budget that have pushed up long-term borrowing costs, inflation, sky-high food and fuel. Economies worldwide are feeling similar pain. And on top of that property prices here are at an all-time high with plenty of scope to fall.
“This is a perfect storm of events, so it’s easy to see why the Bank is predicting a large drop. But it’s not yet a done deal. Prices are sure to wobble, but some regions may just tough it out.”Jonathan Rolande
Explaining how some regions might escape a big drop, Mr Rolande, a spokesman for the National Association of Property Buyers, continued:
“In many places, there’s a genuine shortage of property, and this won’t go away if prices fall. People need to live somewhere and they may need to rent, which will in turn push up sale prices as landlords feel secure buying an investment.
“Interest rates are still lower than in previous dips. Overseas investors are still keen to come here, more so given the weakness of the pound recently. The Bank of England looks set to increase rates again and ironically this could help settle the markets and make borrowing a little cheaper, longer term.”Jonathan Rolande
Commenting on the importance of strong leadership from Number Ten, Mr Rolande added:
“Rishi Sunak’s policies now are vital. They could, at least in the short to medium term, get things back on track. But more than ever we must assess the market on an almost weekly basis.
Lloyds are quite right to plan for the worst, but there are also reasons to hope for the best. The weeks as we approach Christmas are going to be crucial as to what 2023 will deliver in terms of house prices.”Jonathan Rolande