Introduction

For nearly a year now we have seen the housing market soar. This occurred when the UK came out of the harsh winter lockdown and many factors contributed to this surge. These include the stamp duty freeze and the high demand for housing. We have seen a continuing rise in house prices across the UK. But is that bubble soon set to burst? Here we’ll look at what is occurring in the market and what the experts have to say about it.

What are the Housing Market Predictions?

According to Zoopla by the end of 2022 we will see a stagnation in property prices. They predict that growth in property prices will be 3.5%. This would be markedly down from a 7.8% growth in February. However, whilst there is still growth some fear it could be the start of stagnation in property prices. Now stagnation is a difficult thing to deal with and it’s not a phrase everyone understands. It is essentially where whilst there is not fall there is no growth, much like being a Tottenham fan. But the main question is, what’s causing all this?

The International Crisis

The thing that has dominated the news in the past few weeks has been the Russian invasion of Ukraine. This has led to a major escalation in tension between NATO and Russia. NATO has placed heavy sanctions on Russia and its Oligarchs and sent munitions to help the Ukrainian forces. With this mass increase in tension the threat of war is looming heavier than it has since the 1930s. This has caused unpredictability economically across the world. This unpredictability also has an adverse effect on the markets which could explain the expected decrease in growth.

Rise in Mortgages

As we have stated in previous articles the Bank of England has raised interest rates to 0.5%. Despite interest rates already being raised this year alone, there is currently much speculation on them being raised in March. This raise is expected to be set to 0.75%. This would mean another increase in mortgage prices. Along with many other economic factors this will make it harder for people to pay them off.

How the Rise in Inflation will Affect the Housing Market

As we are all aware the current economic situation looks bleaker then an Eastenders episode. The government has borrowed a lot of money and businesses have taken a hit from the lockdowns. This has led to a rise in taxes and national insurance set to come into effect in April. It has also led to a rise in inflation, and it is expected to continue to rise throughout the spring. This means that everything is going to become more expensive, we are already seeing this with fuel prices.

What also has a negative effect on people is that whilst things are getting more expensive, wages aren’t rising. This means that people will have less money to put into savings which means saving for a deposit will take longer. To simply put it, because of inflation and economic hardships, people just can’t afford to buy a house right now. Obviously, this will have an effect on the housing market and this is what Zoopla predicts.

Credibble offers two fabulous solutions.

If you’re preparing to take a mortgage, never apply until you’ve tried our unique and FREE Credibble Home app. Our smart technology will tell you what you need to fix so you avoid rejection. The app predicts when you will be able to buy, for how much and tracks your month-by-month progress to mortgage success. We’ve even added your own mortgage broker, so you get the best deals available.

More focused on your credit rating? Well, get started for free with Credibble’s 24- Factor Credit Check to truly help you improve your creditworthiness and how lenders view you. (Remember: lenders don’t use your credit score! We’ll show you what lenders look for and how to get your credit report in the best shape possible).

You May Also Like
Read More

Will it Become Easier Getting a Mortgage?

The Bank of England is set to unveil a change in the mortgage application system. This change could see it become easier to get a mortgage. In this article we take a look at what this change is and what it spells out for people.
Read More

The Cladding Scandal

In 2017 we witnessed the horrific fire at Grenfell tower, which was exacerbated by the building being covered in cladding. The government have recently announced a new plan to tackle the cladding left on other buildings. But how has this left residents feeling? In this article we explore what the reaction has been to the announcement,