House prices oh god no

ended 17. May 2022

There's no doubt I am being punished for sins in a previous life. I just hope they were extraordinary… biblical. They must have been because I'm being tortured with yet another News Alert on house prices.

Tomorrow morning at 09:30, we're getting the Land Registry HPI for March. Yep, that's the one that's based on actual sales rather than Rightmove asking price dross. Usual questions….

  • Is the property market going to crash when we're all eating each other and climbing inside cattle like that scene from Star Wars simply to stay warm?
  • Even if buyers continue to make daft offers to buy overpriced properties with wafer thin walls, are lenders going to cool the market down as they tighten their criteria for the storm ahead and raise rates?
  • How much do you think prices will fall by if/when the sh!t hits the fan (warning: it's already flying across the room at speed and ETA is tomorrow AM at 07:00 when the inflation data drops)? Or will they just stabilise?
  • Will prices be supported by the lack of supply, even if a loaf of Mighty White and a Pot Noodle cost £2,500? 

Blah blah. You know what to do. If you use the phrases ‘original sin’, 'Mighty White' or ‘Pot Noodle’, I'll probably pin you.

3 responses from the Newspage community

Legend
Lewis Shaw
Founder & Mortgage Expert at Shaw Financial Services
"The property market is teetering on the edge of the abyss, and the Government and Bank of England will need to tread a fine line to prevent it from falling right in. We've just had the lowest unemployment figures for the past 50 years, though wages are stagnating and the spectre of inflation is haunting the economy. But house prices continue to rise. It feels as though a central banker has made a Faustian pact to keep property prices buoyant because there can be no other explanation for the inexorable rise that we keep seeing month on month. It's just a shame we can't eat bricks and mortar because we've got even bigger worries coming down the tracks that are not being talked about with the gravity it deserves; that is, both food prices and the inevitable shortage caused by the war. It's going to get spicy."
Star Quote
Premium
Lee Griffiths
Managing Director at Open House Estate Agents
"In my area, I already feel as though the market is cooling. I've been saying to my clients that the curve seems to be flattening and that prices are levelling out on the whole. The exception is properties that are firmly in the first-time buyer category, and these are still as hot as a Bombay Bad Boy Pot Noodle, with the whole sachet of chilli sauce. Local brokers have told me this week that lenders have changed their affordability criteria in response to the cost of living crisis, meaning they're lending less. I've also started to see down-valuations on a handful of our transactions. I don't feel that the 'lack of supply' will support prices for much longer, as we're seeing increased instructions across the spectrum of property values."
Premium
Scott Taylor-Barr
Financial Adviser at Carl Summers Financial Services
'Shall we buy a loaf of Mighty White and a Pot Noodle, or buy a house darling?' With the way that house prices and inflation are going, this may feel like the sort of conversation that's happening in households up and down the land, but no one's asked me to mortgage any bakery goods just yet. As is often the case in life, the truth falls between the doom mongers and those pretending that everything is fine. House prices continue to rise, no one really knows why as every economic indicator seems to suggest they shouldn't be, but saying that not many economic models had a global pandemic and a war on Europe's eastern edges built into them. The lack of housing supply across the UK has been an issue for years and now many people have been freed from having to live in the same town as their work; the flood gates have opened as people buy property where they WANT to live, as opposed to where they HAVE to live. The result being a stampeding property market. However, there will come a tipping point and despite its ability to weather the storms to date, there is a hurricane brewing. Food prices have already risen and are due to rise sharply further still, along with energy prices and likely fuel prices too; mostly thanks to Mr Putin who's invasion of Ukraine has compounded the global supply issues that the world was trying to tackle as countries recover (or not) from COVID at different rates. So, what happens next? The most likely outcome is a plateauing of house prices as these factors weigh on people's desire to move home, the questions are then 'when' and 'how quickly'?