x
By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards

TODAY'S OTHER NEWS

Brexit and Covid crises may undo recent house price gains

Rising inflation triggered by the supply chain crisis following Brexit and the pandemic may undermine recent house price gains according to a leading analyst.

The Home house price index now shows that three regions have house price growth lower than the latest ONS inflation figure of 5.0 per cent

The latest edition of the index says that the stamp duty holiday and Covid-inspired ‘race for space’ contributed to high house price growth for sales and lettings. But it then says: “Despite all these paper gains in both the sales and rental markets, monetary inflation looks set to make it a zero-sum game. Moreover, price growth is tailing off in several formerly hot regions and others look set to follow.

Advertisement

“Meanwhile, inflation in energy, food and durable goods is climbing rapidly, hence we now face the likelihood of negative growth in the property market in real terms and the possibility of negative yields on rental property. That is a risk that is likely to dampen any savvy investor’s appetite.”

Home reports that the annualised mix-adjusted average asking price across England and Wales now runs at 7.8 per cent; a year ago it was 3.5 per cent.

“Our outlook is that prices and rents will continue to rise in tandem in this highly inflationary environment until there is a significant loosening of supply in either market or mortgage lending becomes tighter, but growth in asset values and yields may well be overshadowed by monetary inflation. 

“Lenders continue to be lenient in regard to arrears and the repossessions court backlog will take a long time to unwind. Moreover, interest rates look set to remain extremely low, with any talk of raising rates to tame inflation unlikely to be enacted.”

 

 

In terms of Home’s market snapshot, a key headline is that the total stock of property for sale in England and Wales is at a record low of 260,590, 41 per cent less than in October 2020. 

The South East is worst hit while Greater London, previously suffering oversupply, has now had a further drop in the number of new instructions.

Typical Time on Market for unsold property in England and Wales has fallen by two days since last month to 80 days, defying seasonal expectations.

icon

Please login to comment

HBB Solutions HBB Solutions HBB Solutions
sign up