House prices could fall by eight to 10% next year, according to statements given by mortgage experts yesterday at a special meeting of The Treasury Committee.
As part of the meeting regarding the current state of the mortgage market, MPs questioned a panel of mortgage experts about the ongoing volatility within the industry – as well as what house prices might look like going forward.
When asked what his predictions were for prices next year, Chris Rhodes, chief finance officer at Nationwide, said: “I wish I knew.”
Warning of a potential decline in prices, he continued: “Best case is slowly increasing house prices, my worst case is potentially a 30% fall”.
And while that might sound like an ominous prediction, Rhodes assured MPs that those two options were “extreme” probabilities.
“In the core, we would have a weighted average of an eight to 10% decline”, he added.
“It’s really important that everyone recognises that is not a forecast.”
Nationwide announced this week at there was a 0.9% fall in house prices already this September.
This comes as demand from buyers has declined, following weeks of economic turmoil due to the mini-budget, cost-of-living crisis, and ongoing mortgage and interest rate hikes.
Ray Boulger, senior mortgage technical manager at John Charcol, added: “I think house prices will fall between 10 and 15%.
“One of the key drivers of house prices is what people can borrow.
“If the ability to borrow is reduced, that’s going to have an impact on prices.”
When asked about the prospect of Government intervention, he continued: “If the Government introduces anything that means that people can borrow more money, it pushes prices up.
“But it also helps more people get onto the housing market. It’s a difficult conundrum.”
With interest rates still on the rise following today’s decision by The Bank of England, it’s difficult to see a returning influx of house-buyers anytime soon.
This means almost certainly means a contraction of house prices is on the cards for next year.
