Will there be a Housing Market Crash
People who pay attention to news and talks surrounding the market may have heard whispers about property prices potentially returning to normal.
However, we are still seeing house prices grow month on month, so, what is going to happen?
Predicting with certainty what the housing market is going to do is a challenge similar to predicting years ago that we would be thrown into a global pandemic. In all seriousness, this is a fair comparison because external factors like the pandemic can have very dramatic knock-on effects on the housing market. For example, a combination of lock down increasing demand for more space and government intervention including the stamp duty holiday led to a surge in transactions and a boom in property prices.
What we can do however, is make predictions based on material factors we are aware of, including government announcements, property stock levels, and portal statistics, past trends, interest rates, and more. Whilst this does often offer us a lot of information to make informed predictions, comparing sources will show you a varied range of perspectives, with some agent's predictions remaining particularly bullish, whilst others are more representational of current factors in the market.
One major player in the discussion surrounding house prices is the current cost of living crisis which could see the pressure on households' finances inevitable effect on their affordability, and translate into lower levels of demand, especially within a certain price bracket. Experts suggest we may already be seeing the impact of higher cost of living, with price growth in June (according to Rightmove) being the lowest this year since January. That being said, it was still the fifth consecutive month of positive growth showing property prices are still reaching record highs.
Property portals such as Rightmove and Zoopla have said that the housing market remains much busier than pre-pandemic levels, although the amount of time taken on the market to sell and the proportion of sellers reducing their asking price has increased. Zoopla has said they predict house price inflation to fall to 3% by the end of the year. A separate analysis however conducted by an economic forecasting group suggests a slow/crash is unlikely to happen. In fact, they predict the end of the year will see prices 8% higher than the end of 2021, with positive growth continuing although slowly decreasing over the next few years.
The UK currently has one of the least affordable housing markets in the world, according to a money.co.uk study, so action needs to be taken to combat the severe lack of housing in comparison to the population to make the possibility of making it on to the property ladder more achievable.
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10th Sep 2021
Forest Marble were fantastic throughout the whole moving process. I would not hesitate to recommend them to anyone and would never use another estate agent in the area! Amy was kind and professional, communicating with me daily when necessary. With lawyer complications she kept me sane! Aaron and the rest of the team were equally lovely and helpful whenever I rang. Nothing was too much.
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23rd Aug 2021
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