House Prices May Fall 15%

Published / Last Updated on 06/10/2022

Recently Credit Suisse has published its report on the Chancellor’s infamous tax cutting mini budget.  In the report, it suggests monetary tightening in terms of government spending as well as the weaker pound, will keep inflation up and interest rates up for an extended period.

As a result, they also suggest that house prices could fall between 10-15%.

Comment

We are not one for exact forecasts as invariably they prove inaccurate and sometimes can leave any commentator embarrassed.  You cannot predict the future, but you can make educated and informed guesses.  We do predict a fall in house prices, but it will depend upon what further actions after the recent stamp duty cuts that the government takes to underpin the housing market.

We suggested in a video last week when looking at a weak pound, in the medium and longer term, house prices tend to rise on average 6-7% above interest rates.  Our short-term forecast is gloomy as recession hits, interest rates rise and inflation may force businesses to close with many out of work.  Mortgage rate increases may also force many to sell up as well as greater pressure on landlords with new fire safety regulations coming into force this year as well as energy performance/efficiency standards for let properties in 2025 and 2028.

Read Watch: Weak Pound

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