Halifax HPI: ‘Sellers rush to auction house ahead of predicted crash’, experts say

Following the May Halifax House Price Index published this morning, which revealed that house prices rose 1.0% in May, nine mortgage brokers and real estate agents share their thoughts.

Andrew Montlake, managing director of the UK-wide mortgage broker, Coreco: “The real estate market is out of step with economic reality. Everything suggests that prices should fall and that they will still rise, if not at the same rate as in April. However, the house price boom and sellers’ grip on the market will soon be over as inflation sets in and people’s confidence and purchasing power are hit for six years. Soaring inflation, rising interest rates and the very real prospect of a coming recession will hit demand as lenders become increasingly cautious, limiting what people can borrow. The rate of price growth will almost certainly slow in the second half of 2022 and into 2023. Few can deny that a phenomenal economic storm is blowing right now and the lack of supply may not be enough to protect prices. .

Imogen Sporle, Head of Term Finance in London finanze: “Activity in the housing market is down as inflation hits confidence and portfolios. We have almost certainly passed the peak of the sellers’ market as sellers become increasingly flexible with prices. We have seen sellers rushing to the auction house to sell their properties ahead of the expected crash.If lenders are more cautious and factoring in the rising cost of living, we are not seeing it yet. real estate should fall, especially if the job market starts to slump. Demand could, however, be supported by foreign investors buying rental properties. By the end of the year, we expect that property prices are returning to pre-Covid levels, with a potential further decline in 2023.”

Ross Boyd, founder of the still-active mortgage comparison platform, Dashly.com: “Double-digit house price growth as inflation nears double digits is madness. We may see one last wave of new home buyers before the storm hits. The current rate of price growth, although slowing, simply cannot continue and the second half of the year could be very different from the first.With skyrocketing bills across the board, households are shutting down hatches and it will hit the bricks and mortar.

Joe Garner, managing director of the London-based property developer, New place: “While we are still seeing strong demand for our properties live, in the second half of the year our forecasted sales are starting to stagnate as the cost of living crisis takes hold and buyers become cautious and avoid making the wrong choice at the wrong time. Serious, pre-qualified buyers are always eager to finish and are ready to fulfill that desire with solid offers, up to 5% above the asking price. However, the number of serious buyers and even window shopping seems to be decreasing Not only are lenders more cautious but inventory levels are decreasing even more If the job market starts to weaken we will likely see an impact on transactions, from first-time buyers to downsizing We estimate there could be a potential reduction of 10% to 15% in house prices for second-hand transactions, particularly on the upper segment of the market, as the impact of the cost of living crisis and the instability of the labor market create uncertainty and fear. New construction property prices are expected to stabilize and remain at current levels as supply remains low in a post-pandemic environment.

Graham Cox, founder of the Bristol-based broker, AutoEmployedMortgageHub.com: “I think property prices will drop 5% this year and possibly even more in 2023. Property prices are already breaking records and transaction levels are falling. Mortgage costs, fuel, food and energy prices continue to soar with no end in sight. Add in National Insurance and tax hikes, the terrible events unfolding in Ukraine and the fall energy cap increase and it’s a recipe for economic disaster the full effects of which we won’t see until the end of the day. ‘winter. Real estate prices can only go down. »

Charles Yuille, managing director of the Bath-based independent mortgage broker, Willow Brook Mortgages: “The surreal growth in the housing market over the past two years, highlighted once again in April, is about to be hit by very real economic forces. As the cost of living crisis unfolds accelerates and interest rates rise to curb the highest inflation we have seen in decades, the rate of price growth can only begin to slow.The level of price growth we have seen during the pandemic simply cannot continue and will almost certainly fall in 2022. However, the phenomenal lack of supply will ensure that prices stabilize rather than crash.

Rhys Schofield, Managing Director of Belper Advanced mortgages and protection: Admittedly, the housing market seems a little less frenetic, but it remains buoyant, with house prices continuing to rise, if not at the same rate. The prospect of an impending crash or bubble burst may grab the headlines, but it is detached from reality. There are far fewer properties than potential buyers who want them and the alternative for many is renting. If you think the supply in the sale market is bad, rents skyrocket and rental supply is even scarcer. All of this is pushing more and more people to try to buy a limited number of homes, which will support prices no matter what.

Amey Hellen of Derby-based estate agents, Boxall Brown & Jones: Right now the market is still very strong and there are plenty of buyers for every property. On some occasions we have had over 20 visits for a property in less than 24 hours. It’s definitely still a seller’s market. Sellers hold their ground for their price, and more often than not, they meet the asking price or the bids are exceeded. Lenders are still cautious but no more than normal. Buyers who earn a good salary with at least a 5% down payment have no problems with financing at the moment. As there is always a shortage of homes in general, demand will remain strong even if economic conditions deteriorate. I think the prices at the end of the year will be similar to what they are now because the demand is still so strong. »

Lewis Shaw, founder of Mansfield Shaw Financial Services: “It is certain that the Bank of England will continue to raise the base rate, which is its only hope of containing the current inflationary beast and, if we are lucky, of tipping us into a small recession. . If the government and the Bank of England don’t start to get inflation under control and keep the drip feed policy going and raise marginal rates, there is a real risk that rates will have to go a lot higher, causing a deep recession. If that happened, we would see house prices go down, foreclosures go up, and unemployment go up.