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In its five-year house price forecast, real estate agent Knight Frank revealed that we can expect house prices to rise further in 2022 and 2023, but at a much slower pace than expected, hitting the highest figure at the start of the year.
Since the housing market reopened in 2020, house prices have been rising steadily. Earlier this month, Halifax reported that house prices were rising at the fastest pace since 2007, with an annual rate of 11 per cent in March, the highest of any year. Since mid-2007.
However, in its house price forecast released this morning, Knight Frank revealed that it expects house price growth to start slowing to 5 per cent this year and 1 per cent in 2023 due to the impact of the cost of living. .
Knight Frank house price forecast
“The UK property market has defied gravity during the pandemic. A shortage of supply, low interest rates, households accumulating assets and a desire for more space and greenery have led to double-digit growth in house prices over the past year,” the head of the agency Tom Bill said. UK housing survey Knight Frank explains..’We think 2022 will be when this starts to subside and growth returns to single digits.
“We expect UK prices to rise by 5% this year, and despite the stamp duty holiday ending in September last year, a number of factors have held back growth in recent months.
“First, mortgage rates will continue to rise with interest rates,” he explained. The conflict in Ukraine may slow this pace of normalization, but the Bank of England is under pressure to deal with short-term inflationary pressures and a longer-term recovery in the UK economy. “
The most important factor, however, is an increase in housing supply. “Inadequate supply is the main reason for the sharp rise in house prices, and the first signs this spring are that inventory levels are rising,” he added.
Rightmove revealed that similar growth in house prices is expected to moderate in the second half of 2022.Tim Bannister, Director of Real Estate Data at Rightmove, explained. Inflation and rising cost of living could also affect buyer affordability and market sentiment.
Will house prices fall in 2023?
But what does this mean for house prices in 2023? Knight Frank predicts that house prices will continue to rise, albeit at a much slower pace, suggesting that while the “competitive space” may have calmed down, it will remain an incentive for home buyers after the wave has ended.
“Harmony between work and family life is not far off for many, and the desire to improve housing conditions after successive school closures continues to drive demand, which combined in many schools has allowed for the accumulation of family wealth, the economy. Recovery District. Tom Bill Say. ‘However, we expect cost of living pressures to intensify in 2023, and we expect house prices to rise by 1% before starting a slow recovery.
House prices show no signs of falling over the next five years, although the rate of price growth is expected to slow. Overall, Knight Frank forecasts a cumulative 13.6% rise in house prices over the next five years.
Source : idealhome.co.uk