UK housing market slows down

The latest market analysis by a Japanese financial holding company has revealed that British house prices look on track to fall by around fifteen percent by mid-next year.

According to Reuters, Nomura said house prices are likely to need to fall by between 10 percent and 20 percent from the peak they reached last year for the ratio between higher monthly interest payments and squeezed incomes to return to normal levels.

The country’s housing market is already showing signs of a reversal, after the COVID-19 pandemic and tax breaks spurred a 29 percent surge in house prices on the official measure. Since Kwasi Kawarteng’s September 2022 disastrous mini-budget, new research has also revealed that the average asking price of a UK property has plummeted by as much as £315000 in some areas.

Four months on and house prices are yet to recover with numerous house price indices showing that the rate of house price growth has started to slide. A separate Britain’s house price study has unveiled where the property market has started to slide when looking at the change in average house price at postcode level.

House Buyer Bureau, pointed out that for instance, in Surrey’s GU25 postcode district of Runnymede, the average asking price has plummeted by -£315,368, falling from roughly £1.9million in September to £1.6million today. Similarly, in Hampshire’s New Forest SO42 district, the average asking price fell from just over £1million to £781,257, a drop of a whopping £289,605.

House prices set for fifteen percent drop; industry pundits predict that the ‘crash' won't be as bad as everyone thinks.

Nomura economists George Buckley, Andrzej Szczepaniak and George Moran said in a research note, "We have thus settled on a central forecast of a 15% fall by mid-2024, which while in the middle of the above range would be a larger fall than assumed by the Bank of England, Office for Budget Responsibility and consensus”.

The Japanese investment giant further warned that the slumping house prices would feed through into the Bank of England's monetary policy. "A weaker housing market, and economy to boot, should provide justification for the Bank to end its tightening cycle soon... and begin easing policy in 2024," the economists said.

Albeit Nomura expects the BoE's Bank Rate to peak at 4.25 percent this year, up from 3.5 percent now, before falling to around 3.5 percent midway through next year, a report from British daily The Telegraph points out that country’s house price crash' won't be as bad as everyone thinks. The market might be flashing red – but house prices are unlikely to fall for long.

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