House prices are expected to drop by around 2% in the second half of the year due to the recent surge in mortgage rates, Pantheon Macroeconomics’ senior U.K. economist Gabriella Dickens has predicted.
She added that the increase in mortgage rates for new borrowers would be a burden even if house prices and the average mortgage size hold steady.
Looking ahead to 2023 Dickens predicts that house prices will increase by 2.5%. However, that prediction is based on the Bank of England will stopping the increases to the base rate sooner than anticipated.
Yesterday, Knight Frank revised its house price forecast up for 2022. The firm now forecasts an increase of 8%, up from an earlier 5%.
Annual house price growth rose to 12.4% in April, according to the latest data from the ONS.
While both Nationwide and Halifax reported double-digit house price growth for May.Â
