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Tom Bill, head of UK residential research at the estate agent Knight Frank, says that house prices are “going sideways” as a result of higher mortgage rates since the start of the war in the Middle East.
The good news is that geopolitical risks are subsiding as both sides move gradually towards a ceasefire and mortgages are edging lower. The bad news is that domestic political risks are rising and various trial balloons about changes to property taxation are being floated for the third consecutive year, which will keep a lid on activity and prices this summer.”
The encouraging news is that brokers are already seeing the first signs of a correction coming through on fixed rates – not a return to the sub-4% deals of six weeks ago, but a genuine easing from where we’ve been.
If this continues, we’d expect to see it feed through into more confident buyer activity over the coming months, rather than the cautious, wait-and-see approach that’s kept price growth so muted.
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