The cost of living crisis and the instability created by Russia’s invasion of Ukraine will eventually impact the housing market, industry figures have warned.
These comments followed yesterday’s Halifax house price report, which revealed how the ongoing lack of supply but continuing demand pushed up prices to an incredible annual figure of 11% following a 1.4% jump last month.
“The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on households’ finances,” says Russell Galley, MD of the Halifax.
“Although there is some recent evidence of more homes coming onto the market, the fundamental issue remains that too many buyers are chasing too few properties.”
But despite this, many agents and brokers have warned that the next few months will be crucial, and that uncertainty caused by ballooning energy prices is working its way up the property ladder.
Nathan Emerson (pictured), Propertymark’s CEO, says: “The cost of living crisis will undoubtedly show its effects in the market in the coming months, with many households facing increasing energy bills, we could also start to see more efficient homes start to hold premiums over older or less efficient homes.”
Nicky Stevenson, MD of Fine & Country, adds: “Whether buyers are forced to reassess their budgets later in the year will depend on how acute affordability pressures later become.”
Alex Lyle, director of Richmond estate agency Antony Roberts, says: “This strong level of demand is likely to remain over coming months but more stock is required across all price ranges for that demand to remain committed.
“The rising cost of living, increases in interest rates and conflict abroad may in time dent confidence and impact sales volumes.”