Housing prices in Britain hit an all-time high in June, but are likely to start falling in the coming months as five interest rate hikes and the worsening of the cost of living crisis they are finally starting to break the real estate market record, according to Rightmove.
The property’s website said that asking prices reached a record high for the fifth month in a row in June, rising 0.3%, or £ 1,113, to £ 368,614. However, this was the smallest monthly increase since January, and the site says, “The exceptional pace of the market is relaxing a bit.”
Rightmove added: “After a very strong first half of the year, the crisis in housing accessibility is likely to have a greater impact on market behavior in the coming months, and new ones are expected. interest rate hikes during this period.
“This, along with more options coming to market for buyers and the usual seasonal variations we expect, means that there is likely to be some month-on-month price drop during the second half of the year.”
As a result, the website expects the annual rate of price growth to halve from its current 9.7% to 5% by the end of this year.
Rightmove also warned that a “transport congestion” meant that those who wanted to sell their property had to come to the market in the coming weeks to have the best chance of moving before Christmas. A spokesman said that, on average, it currently takes 150 days to complete a purchase after agreeing to a sale, 50 days longer than during the same period in 2019.
In a separate analysis, the EY Item Club, an economic forecasting group, had a more optimistic view of the likely fate of the real estate market. He predicted that house prices would enjoy “continued growth” with a “unlikely” drop, and estimated that the typical house would end up worth £ 52,000 more this year than it was just before start of the coronavirus pandemic.
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It predicts that prices will end 8% more this year than at the end of 2021, and then rise in smaller amounts, 1.8% and 1.2%, in 2023 and 2024, respectively.
The group, which bases its figures on the UK economy’s Treasury model, said that while the pace of growth in house prices is likely to slow as a result of affordability. stretching, rising interest rates and falling household incomes, other factors such as the shortage of homes for sale, low unemployment and the “uneven effects” of cost of living pressures would prevent the fall. of prices.
The EY Item Club expects an average UK home to cost £ 283,000 later this year. This would be 23% higher than the £ 231,000 figure in the first three months of 2020, just before the start of the pandemic.