HOUSE prices will soon start to “flatline” following years of double digit rises, a leading property association claims this morning.
Property values have continued to soar over the past two years in most regions of the UK – often defying predictions by economists who are convinced a crash is on the horizon.
The National Association of Property Buyers told City A.M. this morning that after months of looking “immune” to falling rates, house prices will soon start to reduce.
Spokesman Jonathan Rolande said: “It won’t be long before we see house price growth slowing to perhaps 5 per cent in most areas.”
He added: “This is still high, but compared to retail inflation, it is less than half. As the price of everything else rises, property will therefore gradually begin to look like better value than it does right now.”
Commenting on the way the market has performed in recent months, Rolande, the founder of House Buy Fast, added: “The property market has become its own being, seemingly immune to market forces, able to grow and grow when industry experts and insiders said it just wasn’t sustainable. But grow it did at double the amount even optimistic reports anticipated.”
However Rolande warned the cost of living, and the impact this is having on prices, means the predicted fall in house prices might not necessarily be good news.
He added: “We’ve become used to seeing eye-watering double digit inflation in the property market as prices rebounded post-lockdown. But that has created its own set of problems with many – especially younger buyers – giving up all hope of ever buying a home. That was bad enough. But in many ways what we’re now seeing is even worse.
Inflation in every aspect of life is beginning to bite.
Rolande stressed that homeowners have, like everyone else, seen their bills increasing and have had the extra burden of a large interest rate rise last week adding over £2000 this year to the average loan.
“The Bank of England is actively trying to take money out of people’s pockets to curb inflation and homeowners are feeling the pinch,” he added.
“When property prices increase it’s frustrating but at least people can focus on other aspects of their life and hope to make the move at some time in the future,” Rolande said.
“The same can’t be said for food and heating. You can’t put eating ‘on hold’. The drastic reduction in people’s available money will inevitably affect the property market too and let’s face it, a slowdown in the increases is long overdue,” he concluded.