The cost of living crisis is beginning to impact housing market, Nitesh Patel (pictured), Yorkshire Building Society’s strategic economist, has warned.
Chancellor Rishi Sunak has made his Spring Statment to Parliament today as he tried to address spiraling costs.
This saw Sunak cut tax on fuel and increase the National Insurance threshold.
Patel said: “Because most homeowners are locked into long-term fixed rate mortgage deals, it tends to take longer for inflationary pressure to be felt in the housing market.
“The market has been buoyant until now, with the number of first-time buyers at a 20-year high in 2021.
“However we’re now starting to see signs of activity slowing, and as inflation begins to have more of an impact on mortgages I expect it to slow further still.
“As well as making it more difficult for families to secure a suitable home of their own, a slowdown in the housing market could have a knock-on impact for the millions of people whose jobs rely on the home-moving process – including those who work for removal firms, to solicitors, builders, new furniture manufacturers and decorators.
“The Chancellor will be acutely aware that this is an outcome that needs to be avoided, and should consider how to preserve the health of the housing market and ensure that homeownership remains accessible.
“To this end, I would encourage the Chancellor to look at reforming Stamp Duty so that it doesn’t act as a barrier to households in securing a home suitable for their needs.”
