Housing market ‘not out of woods yet’ and prices will fall, analyst warns
Rob Morgan of Charles Stanley says interest rate cuts cannot be taken for granted with some real risks to inflation.
Leading City analyst Rob Morgan (main picture) has warned that the housing market is not out of the woods yet, and house prices will still fall this year.
In an outspoken statement that bucks the current optimistic trend, Morgan, who is Chief Investment Analyst at wealth management firm Charles Stanley, warns that interest rate falls cannot be taken for granted.
He says inflation may be tamed in the short term, but this could change with a General Election and rising tensions in the Middle East.
Slammed
The RICS UK Residential Market Survey revealed this week that new buyer enquiries rose by 7% in January from a fall of 3% in December. And the number of sales agreed also swung into the positive from -5% to +5.
And Halifax also showed a 1.3% monthly rise in the average house price and a 2.5% annual increase.
Property industry figure Russell Quirk’s latest video slammed pundits who claim that the property market faces ‘Armageddon’ including drastic house price reductions.
But Morgan says: “Overall, house prices have proven resilient despite the ramp up in interest rates over the past two years, thanks largely to rising wages and the rental market offering fewer affordable options.
It would be wrong, however, to conclude that the housing market will be in a healthy state for the remainder of 2024.”
“It would be wrong, however, to conclude that the housing market will be in a healthy state for the remainder of 2024.
Spanners
Falling inflation and interest rates “cannot be taken for granted”, he warns.
A small fall in prices therefore looks the most likely scenario for 2024 overall.”
He says there are some “potential spanners” in the shape of the General Election and the situation in the Middle East.
The fact many homeowners are set to come off cheaper mortgage rate deals means they will be unable to trade up, which will “stagnate parts of the market”.
“A small fall in prices therefore looks the most likely scenario for 2024 overall.”
