The Daily Mail has published an interactive map showing the UK areas with the worst drops in house prices recently. They discussed the state of the market with RICS, who said it “paints the picture of a housing market continuing to lose ground to the effects of higher mortgage rates.”
What’s happening with UK House Prices?
- House Prices are Falling: A new interactive map showed that homeowners across the UK are seeing drops in their property values.
- By How Much? Between April and May, the average house prices fell in over half of local areas. Some places saw drops ranging from £15,000 to £20,000.
- How Bad is It? It’s similar to the start of the COVID pandemic, when house sales nearly stopped due to a government freeze on buying and selling.
What the Data Tells Us:
- Survey Findings: A survey from the Royal Institute of Chartered Surveyors (RICS) found that a net of 44% of people saw a decline in agreed sales in July. This decline rate is the highest since Spring 2020.
- Buyer Interest: The number of people interested in buying houses has decreased a lot, signaling a drop in demand.
- Future Predictions: They expect sales to continue declining in the near future.
Spotlight on Specific Areas:
- London: The biggest drop was in Camden, London with a decline of nearly £22,000. However, this is just a 2.5% decrease.
- Outside London: In Wychavon, Worcestershire, house prices fell by £19,700 (5.7%). Some local homeowners aren’t too worried because many are retired and might not be looking to sell soon.
What the Experts Say:
RICS Chief Economist: Simon Rubinsohn expressed concerns about the sluggish market, especially for first-time buyers. He predicts house prices might decline by another 4-5% this year.
Estate Agents: Ben from Evesham firm mentioned that while house prices remain robust, reductions are now more common. Houses priced between £350,000 and £500,000 are struggling the most due to high mortgage rates.
Local Views: Residents in areas like Esher, Surrey feel that the dip in house prices is disappointing. However, some aren’t too concerned about selling as they believe there’s a lack of housing in sought-after areas.
The Bigger Economic Picture:
- Mortgage Repayments: These have doubled in some parts since 2020. So, many are now paying more than £1,000 a month.
- Policies Impact: The price drops might be due to high interest rates introduced after certain policies, such as a ‘mini budget’.
- Future Uncertainty: Despite some positive news on mortgage rates, there’s uncertainty for the rest of the year. The expectation is for house prices to continue dropping, albeit slightly.
In essence, the UK housing market is facing a challenging period with dropping house prices, influenced by various factors including economic policies and mortgage rate changes. While it’s a tough time for sellers and buyers alike, some areas remain more resilient than others.