Fri 12 May 2023What is happening with UK housing market?
The housing market has slowed sharply in the past six months as borrowing costs increased,the cost of living crisis, house prices started falling after the turmoil in the mortgage market caused by Liz Truss and Kwasi Kwarteng’s mini-budget last September. The Bank of England is expected to raise interest rates to 4.5% this week, which would be a 12th successive rise as it seeks to tame stubbornly high inflation. This was compounded by the cost of living crisis. Higher mortgage rates coupled with rising inflation have impacted the housing market. But data from house price indexes on the state of the property market so far is mixed – some seem to show it’s recovering, while others are recording a slowdown.
Sellers have lost some power compared to last year, but they continue to achieve closer to their asking prices than they did pre-Covid. The average home sold in England & Wales in April achieved 99 per cent of its asking price - this is down compared to April last year but ahead of the 98.1 per cent in April 2019.
The National House Building Council, which provides warranties for buyers of new-build homes, reported a 27% drop in the number of new homes started between January and March. Housebuilding fell at the sharpest pace for almost three years in April, according to the latest construction survey from S&P Global and the Chartered Institute of Procurement and Supply released last week.
Nationwide’s latest house price index showed prices rose 0.5% during the month of April, breaking a seven month-long negative streak, a “tentative sign of recovery”,
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