All UK economic indicators started blinking red, The housing market is relentlessly marching upon.
The National Building Association released the latest home price index and second-quarter regional data this June, and the Bank of England’s latest mortgage lending should also shed more light on the UK real estate market. Prices have risen 5% this year, but due to the uncertainty of the economy as a whole, no annual forecast for national home prices has been released.
Few would have expected such a good situation when realtors were closed at the start of the Covid pandemic and homebuilders dropped tools.
But the demand is Stamp duty holiday, Rishi Sunak was quickly introduced by Rishi Sunak, and after the market was reopened, it supported the market and many office workers started to work from home, so more space and more environmentally friendly environment were required. Was done. Even the end of the stamp duty holiday last summer and the rise of highly infectious variants of Omicron could not stop the price increase.
The Housing market frenzy This is partly due to the lack of available properties. This means that many newly listed homes will be built within a week or two. Mortgage rates are low and the employment market is surprisingly strong. The unemployment rate in April was 3.8%, One of the lowest levels since the 1970s..
The annual rate of increase in home prices across the country fell from 12.1% in April to 11.2% in May, but this is due to the basic impact, with a strong monthly rate of increase of 0.9%, the chief of the country. Economist Robert has risen 10 times in a row. Gardner pointed out.
The key question is how long the market can remain isolated from the cost of living crisis. UK inflation rises to 9.1%, the highest in 40 years May and Five recent rate hikes From the Bank of England. Gardner said there are only tentative signs that the market is slowing, but like other experts, he expects the market to cool in the coming months amid the economic downturn. increase. UK mortgage approval fell to 66,000 in April From 69,500 in March, net mortgage debt decreased from £ 6.4bn to £ 4.1bn. Both measurements were slightly below the pre-pandemic average.
However, analysts have pointed to a resilient labor market, a continuing shortage of interest rates on cheap real estate and mortgages by historical standards.
“I didn’t expect home prices to rise when the UK government closed the home market. I thought home prices would level off at best,” said independent home analyst and founder of real estate website Twindig. Anthony Codling says. “Home prices in the UK have reached new heights, and many want what has risen not to be the case when it has to fall.”
Real estate company Knight Frank is bullish. Home prices have just risen from 5% to 8% this year, just below last year’s 10%.
With more than 80% of existing mortgage holders trading at fixed rates, rising interest rates are expected to have a limited impact on existing mortgage holders. In 2007, at the time of the global financial crisis, about 45% of mortgage balances had floating interest rates, but in 2013 that number increased to 65%. Regular mortgage payments reach 31% of takeaway payments, still well below the 45% high just before the financial crisis, but the long-term average is 29%.
But according to Gardner, a typical first-time buyer’s 10% deposit on their home is equivalent to 56% of their average annual income.
On the other hand, the life of a lessor seems to be tougher than that of a homeowner.Center Economy According to Business Research, rents agreed on for new contracts rose 10.6% in the year to May, with rents in London rising fastest at 15.7%.
The housing market did not appear to be affected by the Covid shock. This week we need to show if the cost of living crisis can take it off course.
Covid couldn’t lower home prices, but the economic downturn | Housing market
Source link Covid couldn’t lower home prices, but the economic downturn | Housing market