Significant house price drop predicted for next year
October 12, 2022 by Brendan O'Neill
House Prices
The latest forecast by the estate agents Knight Frank suggests that the next two years will bring a major drop in average UK house prices, following a long period of price rises.
A fall of as much as 5% during 2023 and the following year is being predicted by the company, before prices start to go up again later in 2024. The Knight Frank figures suggest that these eventual rises will be 2% during that year, followed by a 4% percent increase during 2026. Looked at over a five-year period, this would actually amount to a 1.5% overall rise in house prices.
It is London that is expected to see the steepest regional drop in prices, with a 6% fall during 2023, followed by a further drop of 4% in the year after that. However, it should be noted that London is the UK region that has the highest house prices to begin with.
The report published by Knight Frank posits the expectation of further interest rate rises, predictions of higher inflation and the ever-increasing costs of energy as major factors in the expected house price drops.
According to Mortgage Solutions, the report argues that this will just be a reversal of the COVID-19 created spike in prices:
“As supply and demand continue to normalise, the dominant theme of the next two years will be tighter budgets due to higher monthly interest bills.”
Some mortgage advisors with the CeMAP qualification may welcome this drop, with many clients priced out of the market now.
Written by
Brendan O'Neill
You may also interested in:
House prices dropping due to supply rises
Mortgage advisors have stated that house prices in the UK are now returning to pre-Covid-19 levels, due to
October brought rise in house prices
The average price of a house in the UK went up during October, with the increase being the biggest one seen since the first month of