House prices rose 10.3% in November but fell month on month for first time since 2021

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Home price inflation at 10.3% is still in the double digits, official figures show, but property values ​​fell for first month since October 2021

  • The median house price in the UK is now £295,000 according to the ONS
  • Properties have added £28,000 over the 12 months to November 2022
  • Mortgage rates shot up in October, but many believe the worst is over

Median house prices rose 10.3 per cent year on year to November to £295,000, £28,000 more than the previous year, according to the Office for National Statistics.

However, the average price fell by 0.3 percent or £1,000 compared to October 2022, when the average price reached an all-time high of £296,000. It was the first time prices fell since October 2021.

The annual growth rate also slowed, falling from 12.4 percent the previous month.

House prices fell 0.3% month-on-month in November, with year-over-year growth slowing to 10.3%

Experts said the numbers reflected the economic chaos that followed then-Prime Minister Liz Truss’s mini-budget in late September, which sent mortgage rates soaring.

Mark Harris, CEO of mortgage broker SPF Private Clients: ‘In November both swap rates and fixed-rate mortgages were much higher than they are today, due to the effects of the mini-budget.

Much of that turmoil has now moved through the system, with swaps and fixes continuing to fall.

While the days of the sub-1 percent fix for five years may be long gone, it’s only a matter of time before they fall below 4 percent as the cost of funds falls, service pressures ease and lenders bring in new business. want to do .’

They also blamed the annual Christmas lull in the housing market for the slight fall in prices.

Tom Bill, head of residential research in the UK at Knight Frank, added: ‘Following the September mini budget, a number of buyers and sellers ended Christmas early, which explains the drop in activity in December. However, the last quarter of 2022 does not say much about what will happen this year.

“Buyers and sellers are increasingly understanding that while mortgage payments are falling, a new normal of higher interest rates is emerging, which Liz Truss’s government will soon be unable to blame.”

Average house prices rose by 10.9 per cent to £315,000 in England over the year, by 10.7 per cent to £220,000 in Wales, by 5.5 per cent to £191,000 in Scotland and by 10.7 per cent to £220,000. 176,000 in Northern Ireland.

Data from ONS and the Bank of England shows that mortgage rates have risen rapidly over the past year

This week, Bank of England Governor Andrew Bailey told MPs in parliament that the mortgage market has undergone a correction with product rates falling from October last year’s highs.

He said: ‘I was hoping we would see mortgage rates come down, and they did, we’ve seen new fixed rate mortgage rates come down since then.

“I’m talking about the lower risk part of the mortgage market, meaning loans with a loan-to-value ratio of less than 75 percent, and actually the higher risk part as well.”

Economics director at the Construction Products Association, Noble Francis, said: ‘US house prices in November were still based on transactions (and often mortgage agreements) agreed before the effects of the mini budget and the surge in mortgage rates, so we have a rest’ I haven’t seen the impact yet.’

Predictions about how house prices will fare over the next 12 months vary, but several analysts have suggested they could fall by as much as 10 percent.

The Office for Budget Responsibility has said that house prices will fall by 9 percent between the end of 2022 and the end of 2024.

And elsewhere, real estate agent Savills has revised its forecast to a 10 percent fall in house prices by 2023.

>> Read our overview of the real estate market forecasts for the coming year

What to do if you need a mortgage

Borrowers who need to find a mortgage because their current fixed-rate contract is about to expire, or because they have agreed on a home purchase, should explore their options as soon as possible.

This is Money’s best mortgage interest calculator powered by L&C that can show you deals that match your mortgage and property value

What if I have to borrow again?

Borrowers should compare rates and speak with a mortgage broker and be prepared to trade to secure a rate.

Anyone with a fixed-rate deal expiring in the next six to nine months should research how much it would cost them to re-mortgage now — and consider getting a new deal.

Most mortgage agreements allow fees to be added to the loan and are not charged until it is closed. By doing this, borrowers can secure a rate without paying expensive arrangement fees.

What if I buy a house?

Those with an agreed home purchase should also aim to secure rates as soon as possible so they know exactly what their monthly payments will be.

Homebuyers should be careful not to overextend themselves and be prepared for the possibility that house prices could fall from their current highs, due to higher mortgage rates limiting people’s borrowing capacity.

Compare mortgage payments

The best way to compare mortgage rates and find the right deal for you is to talk to a good real estate agent.

You can use our best mortgage interest calculator to display deals that match your home value, mortgage size, term and fixed interest needs.

However, bear in mind that rates can change quickly, so if you need a mortgage it’s advice to compare rates and then speak to an estate agent as soon as possible so they can help you find the right one mortgage for you.

> Check out the best fixed rate mortgages you can apply for

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