HOUSE prices are set to flatten but will not dip into freefall, a leading property expert predicts.
Jonathan Rolande, from the National Association of Property Buyers, said although the cost of living crisis will impact the market it is unlikely to cause the crash many are suggesting. His comments come as new figures show house prices have soared by a record-breaking £55,000 since the pandemic began and are still rising.
Mr Rolande, also the co-founder of House Buy Fast, said: “The market is yet to fully reflect the various pressures that will be put upon it in the next few months – higher interest rates, cost of living increases and more rigorous affordability checks by lenders will all have an effect. “However, there is still very solid demand from buyers and of course the now long-term issue around shortage of supply. Coupled with good employment numbers and the aspiration of many to own their own home, it is possible that the market will slow without the freefall in prices predicted by many. “Some targeted government intervention to guide the market to where it should be is crucial to unlocking supply and helping those who need it most.”
According to figures released this week by Rightmove, the average price tag on a home has reached a record high for the fourth month in a row, jumping by £7,400 in May, according to the website. And across Britain the average asking price for a property this month is £367,501, up from £360,101 in April.
Rightmove said it had never seen before in more than 20 years of tracking property values. Average asking prices have soared by £55,551 in the past two years, compared with a £6,218 increase in the two years before the coronavirus pandemic.
The number of buyers contacting estate agents is 14% down on the stamp-duty holiday-fuelled market of this time last year, but is still up by 31% compared with the more ‘normal’ pre-pandemic market of 2019. The number of properties available to buy is 55% down on the levels seen in 2019, meaning that supply and demand look likely to remain out of kilter for at least the rest of the year. The number of sales agreed is up by 12% in the year to date compared to 2019 even with restricted choice, though is down 17% compared with the ‘exceptional’ market of the same period last year.