Will there be a house price crash? | The Sun09/21/2022
HOUSE prices remain high despite the Covid pandemic and cost of living crisis, with the average property price standing at £292,118.
There are a number of factors driving that growth, including a stamp duty holiday during coronavirus which saw many people moving house.
Plus, an ongoing lack of housing supply means buyers are having to battle it out to get a property.
The Bank of England has hiked interest rates several times this year and that means mortgage rates are on the up too.
Winter will see costs squeezed too for homeowners and first-time buyers alike, with the price of bills and everyday essentials like food to keep on rising.
So with all this going on, what does it mean for house prices, and will there be a crash any time soon?
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Will there be a house price crash?
The last time property prices crashed was in the global financial crisis.
UK house prices reached an average of £190,032 in September 2007 and had dropped to £154,417 by February 2009 – a fall of more than 18%.
They did not regain that peak until August 2014.
Despite recent surges in house prices, Rhys Schofield, managing director at Peak Mortgages and Protection, said he did not expect the current surge to continue.
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He said: "I think double digit growth in house prices is not going to continue and we’ll see a more sustainable figure as interest rates really bite."
However, Greg Cunnington, mortgage broker at LDN Finance, said he did not see prices dropping any time soon due to the high number of buyers on the market compared to the short number of homes.
He said: "There is still a severe stock shortage, meaning there are a lot more would-be buyers than houses available.
"That means most properties coming to market have several competing bids which is keeping prices high."
Liz Truss will reportedly use Friday's mini-budget to cut stamp duty in a bid to drive economic growth.
The Prime Minister has been working on plans with Chancellor Kwasi Kwarteng.
Karen Noye, mortgage expert at Quilter, said the announcement would stop house prices from dropping, with buyers less concerned about paying stamp duty on new homes.
She said: "It may be enough to quell potentially dropping house prices as a result of people opting to stay put and avoid moving costs in the face of the energy crisis, double digit inflation and soaring food costs.
"Buyers could once again be tempted to move despite the macroeconomic backdrop."
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