UK property market will not ‘bounce back’ until late 2024
The boss of PriceHubble, the European property data analysis and tech provider, tells the Neg that the UK property market will continue to decline well into 2024 but not collapse.
The boss of PriceHubble, the European property data analysis and tech provider, warns that the UK property market will continue to decline well into 2024 but will avoid collapse.
PriceHubble founder Stefan Heitmann told The Neg: “We see the UK housing market on a decline and on a very rough patch for 2023. Will it collapse? I don’t think so.”
Heitmann says that there are underlying market dynamics that are strong enough to uphold the market as a whole.
CRASH
“I wouldn’t predict a massive crash here,” he says. “But we have clearly departed from the peaks of the market that we have seen in the last three years. We clearly see the market in depression and crawling backwards on the price level.”
But the fall in house prices is not limited to the UK.
Heitmann adds: “The US housing market is about 30 – 40% below last years’ transactions and depending on the day anywhere between 5 ad 15% lower on house prices. That’s the order of magnitude we see in other markets as well.
“France and Germany have peaked and have dramatically come down in terms of numbers of transactions alongside massive interest rate hikes.
PHENOMENON
“We see a Europe wide phenomenon and we see at least for 2023 and most likely 2024 we are not going to be seeing a massive change in direction as interest rates keep on going and remain high.”
Heitmann says that the immediate pressure on hiking rates is less pronounced than it was late last year but until interest rates start dropping ‘we can easily look forward to 2024 and beyond for it to reverse’.
Heitmann says estate agents wanting to weather thew storm need to make sure that they have the right tools in place to inform their clients.
He adds: “These are challenging markets. Don’t take this lightly. Prepare yourself, prepare your customers and make sure you help them make the right decision.
Unfortunately this will be a market where not all of us will see the end of the tunnel.”
“Unfortunately this will be a market where not all of us will see the end of the tunnel. This is market where it is not as easy as it used to be to sell, to finance.
“The entire market dynamics have shifted and that means that you need to be professionalised. You need to make sure that you’re equipped for those situations.
“We are here to help, to inform. To help the market become more transparent for the benefit of all market participants and that is why I would use this time where you smarten up and tool-up to ensure that you are prepared for these conditions.”
The housing market is now probably inextricably tied to the next general election which could be early 2025, or indeed autumn 2024 (or sooner if the present invisible PM does not get his finger out).
What is certain is that the housing market is likely to take a hit, when the Bank of England base rate increases by 50 points to 4% this week (the 10th upward increase in 14 months) with a likely 25 point hike in March.
FTB’s who make up 53% of mortgage lending will be looking at 7% plus rates for a two year fixed, maybe nearer 8%.
Given they need a 20% deposit and the average property is £300,000 thanks to Rishi and his giveaway SDLT policy which upped prices by 20%, that means they need a 40,000 deposit and can afford over £2,000 a month just to cover their mortgage, add in utilities and food and inflation at 10%, and there is only one way prices of housing will be going this year.
Not to mention WW3, and a PM who is timid hamster, surrounded by government ministers who lie to all, just to line their own pockets by holding positions they should not have.