What's really going on with property prices? We decipher the data on the UK housing market #136

Heath, Wealth & Wisdom with Nicole Bremner

EP136 : Once again I'm joined by property expert Eyeedul Haque to discuss the recent data on the UK property market, with a focus on recent developments related to mortgage rates, inflation and property prices.

We discuss:
- Mortgage payments are set to increase by £500 for approximately 1m households.
- The Bank of England's interest rate has reached a 15-year high at 5.25%.
- Inflation stands at 8.7%, and the government aims to reach a 2% target.
- Effectiveness of the monetary policy in dampening inflation, noting that it might be causing inflationary pressures.
- Rental market is seeing significant rent increases due to rising costs in the economy.
- Prediction that interest rates will likely hit 6% by the end of the year, with some sources suggesting rates may reach 6.5%.
- Housing market is not experiencing a hard landing or freefall but rather a levelling off.
- Continued shortage of new homes.
- New 100% mortgages aimed at first-time buyers suggest confidence.
Key moments:
1:37- Nicole asks about the proportion of the market represented by the 2 million mortgages affected by refinancing this years. Eyeedul explains that 2.4 million households with fixed-rate mortgages will be affected by the end of 2024, which is about a third of mortgage holders.
3:13 - Discussion about the recent increase in interest rates, reaching the highest level in 15 years. The Bank of England's efforts to control inflation, which stands at 8.7%.
4:54 - Eyeedul explains how rising interest rates impact various aspects of the economy, including rents, and predicts that monthly mortgage repayments on average will increase by £500.
7:42 - Rent prices have been increasing, with national rents up by 10% and London rents up by 14.6%. The trend continues with a 10% increase nationally and 9.3% in London.
8:24 - Speculation that interest rates could hit 6% or possibly even 6.5% by the end of the year.
9:50 - Despite some forecasts predicting declines, Eyeedul notes that actual house price decreases have been less severe.
11:22 - Eyeedul explains that the housing market may enter a flat phase for the remainder of 2023.
12:42 - The introduction of 100% mortgage products by some banks suggests confidence in the housing market's stability.
22:45 - Key takeaways: House prices are not in freefall, but rather experiencing a bottoming out. Rents continue to rise due to interest rates and inflation. Interest rate increases are expected to stabilise and peak.
23:47 - Predictions for the future: Eyeedul predicts that house prices will flatline for the remainder of the year, with opportunities for buyers, and advises investors to consider areas with more stable property values.
26:47 - Rental increases and capital value growth assumptions used for modelling, indicating a 5% annual increase for both.
My special guest is Eyeedul Haque, a seasoned expert on housing economics and an insightful commentator on the trends shaping the current housing market. As an experienced property consultant, he has a steady finger on the pulse of market fluctuations and how they impact homeowners, particularly in relation to mortgage payments. His approach is rooted in real-time data analysis and clear, understandable insights, making him a trusted voice on promptly evolving economic scenarios. He applies this passion in guiding property buyers through the intricacies of market trends and property management.

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Disclaimer: The views and opinions expressed in this podcast belong solely to the host and guest speakers. The view and opinions of the guest speakers do not represent that of the host. Always do your own research.