Second half of 2023 ‘looking bleak’ for agents

House prices will fall by at least another 5% between now and Christmas, a property group has warned, creating tough times for agents to sell homes in the coming months.

The bold claim has come from the National Association of Property Buyers (NAPB), which said property spiralling interest rates, soaring inflation and rocketing mortgages have created a “perfect storm” which will reduce already plundering prices.

It comes as the latest Halifax House Price Index last week showed values were down 2.6% annually in June, falling at their fastest rate in 12 years.

RICS agents have also warned of further house price falls and slowing sales activity.

Mortgage rates are also at 15-year highs, hitting 6.78% for a two-year fix last week.

NAPB spokesman Jonathan Rolande said: “I think we are likely to see a further 5% eroded from sale prices this side of Christmas.

“Those who are employed within the property sector should be concerned not so much with price falls, but instead by the reducing sale numbers.

“This is starting to indicate a shift in the market where many homeowners are opting to wait and see what happens to the market and interest rates, and those that are trying to sell are not yet reducing their prices by enough to encourage the smaller number of buyers now looking.

Outlining how he thinks the rest of this year will develop, he added: “The second half of 2023 looks to be quite bleak for many estate agents who will be unable to build up the financial reserves needed to see them through what is likely to be an even more challenging winter market.

“In the rental markets further rises in borrowing rates look likely and the supply of rental property is likely to reduce as landlords sell and aren’t replaced with new entrants, challenging times lay ahead for tenants. Expect further rises in rents although at a slower rate than we have witnessed. We will soon reach a point where further steep rises simply aren’t sustainable.”