Housing market ‘facing 5-6% hit this year…and next’, leading agent predicts
Tom Bill at Knight Frank told the BBC the property industry is being attacked from "all sides at the moment".
House prices will probably fall 5-6% this year and the market is facing the same hit again next year, Tom Bill, head of residential research at Knight Frank (main picture), has predicted.
Bill’s forecast comes as the Bank of England considers whether to raise interest rates again today in an effort to tame inflation.
The latest figures from Nationwide this week revealed the sharpest annual fall in house prices for 14 years last month of 3.8%.
Chaotic journey
Speaking on the BBC’s World at One radio programme, Bill said the property industry had suffered a “chaotic journey” over the last nine months.
He said political turmoil and rising mortgage rates meant “it’s been coming from all sides at the moment”.
“It’s been far more volatile than we would like,” he said.
“Prices will probably go down 5-6% this year and perhaps the same again next year.”
Shock absorber
But Bill did say there won’t be a “cliff-edge moment” for the property market. Mortgage stress testing had worked, acting as a “shock absorber”, he said.
“It is a market that is pretty subdued, and we will probably plod along to the General Election next year.
We are not going to see double digit price declines.”
“We are not going to see double digit price declines,” he added.
The Bank of England’s Monetary Policy Committee will announce its interest rate decision today, following a 0.5% increase in June to 5%.
Interest rates rising or falling has a direct impact on completions, this year 900,000 is a likely figure, last year was 1.25M, and 2021 was 1.45M. The average agent does 8 sales a month nationally, if they do less, market forces will mean selling fees will increase per unit exchanged, as the vendor accepts that they need to pay the ‘performing’ agent more to get them moved in a difficult market.
In fact in the late 1980’s we embraced multi-agency instructions and the 3% fee it produced, as the vendor was not fee sensitive – they just wanted to get their property asset to exchange and completion.
Genius! Whoever would have thought. I love the way everyone plucks figures out of the air then they get quotes and become ‘real’
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