House Prices Experience Steepest Decline in 14 Years as Mortgage Rates Rise Tomorrow
- The value of a typical home has decreased by £10,400 over the past year.
- A 3.8% drop in house prices marks the largest downturn since 2009.
House prices are currently experiencing their sharpest decline in 14 years, as borrowing costs are set to rise further tomorrow.
According to Nationwide Building Society, property prices have dropped by 3.8% over the past year, which marks the largest downturn since July 2009.
Within the past 12 months, the typical home has lost nearly £10,400 in value, putting the average worth at £260,828.
Soaring mortgage rates have tightened the property market, diminishing affordability for many homeowners.
However, borrowers should brace themselves for more mortgage hardships, as the Bank of England is expected to raise interest rates by 0.25 percentage points at tomorrow’s policy meeting.
Over the past 12 months, £10,400 has been wiped off the value of the typical home as soaring mortgage rates have placed a chokehold on the property market
Former senior Bank of England official, Alex Brazier, cautioned yesterday that a recession may be necessary to combat inflation.
‘Inflation has become entrenched, meaning that achieving the Bank’s 2% target likely entails a further slowdown in growth or even a recession and increased unemployment,’ he said.
He predicted that interest rates would peak below 6%, suggesting that further rate increases will be necessary in the coming months to regain control over inflation.
Inflation dropped to 7.9% last month, but it remains persistently high. The elevated cost of borrowing has already impacted the housing market.
There are concerns that another increase in the Bank’s base rate tomorrow could trigger further mortgage rate hikes.
Mortgage rates have already inched higher this week, with the average two-year fixed rate reaching 6.85%, according to analyst Moneyfactscompare.
The 3.8% drop in house prices marks the largest downturn in the UK property market since 2009
As more homeowners switch to higher mortgage rates, the gloom in the housing market is expected to intensify, according to Alice Haine, an analyst at investment platform Bestinvest.
‘Regardless of how good a deal a borrower finds in the current climate, refinancing now comes with significantly higher mortgage costs,’ she said.
‘The financial squeeze will
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
