Rising interest rates and the cost-of-living crisis threaten to trigger a sharp drop in UK house prices, according to expert forecasts.
The property market has boomed over the past decade, with the price of an average UK home reaching a record £286,079 last month – up by 1.1% from March.
And despite fears of a pandemic-induced property crash back in 2020, prices have “rocketed” by around 20% over the past two years, creating a “fresh affordability crisis in the UK’s property market”, said This is Money. The chasm between house prices and average wages is now comparable to that “seen just before the financial crisis” in 2008.
This continued climb against the backdrop of Covid shows that “Britain’s housing market is completely unhinged from economic reality elsewhere”, said the i news site’s housing correspondent Vicky Spratt. Repeating “a question I have asked repeatedly”, she added: “How long can this go on and how worried should we be?”