Ray Bolger says house prices set to fall '10% next year
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New research by property purchasing specialist, House Buyer Bureau, has shared that the UK property market may be grinding to a halt. According to their latest figures, the average level of monthly transactions over the last six months fell by almost a quarter compared to the previous six months – although in some areas this decline is as high as 43 percent.
House Buyer Bureau analysed sales volume data from the Land Registry and looked at the average number of monthly property transactions to have taken place in the last six months (from January 2022 to June 2022 – latest available).
They then looked at how this level of market activity compared to the six months prior (July 2021 to December 2021).
The research showed that in the last six months, an average of 61,651 homes have been sold across the UK on a monthly basis.
While that sounds like a lot, that’s actually 23.8 percent fewer than the 80,958 sold per month in the previous six months.
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The data appears to show that the UK property market is running out of steam across the country, with every area of the UK market seeing a decline in average monthly sales volumes at a regional level.
The North East has witnessed the largest decline, with a 32.5 percent drop in transaction levels, while the North West has also seen a notable decline, down 28.3 percent.
These northern regions are followed by Wales which has seen a -27.7 percent dip, the East Midlands (-27.1 percent) and Yorkshire and the Humber (-27.1 percent).
While the London market was slower during the pandemic property market boom, now it seems the capital is less susceptible to the current market slowdown.
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All other regions in the UK have seen a decline of at least 20 percent, however, London has seen the average number of monthly transactions fall by just 8.4 percent in the last six months.
At local authority level, the market is grinding to a halt to the greatest extent in the Forest of Dean.
There have been just 71 homes sold per month over the last six months.
Transactions were down by 43.1 percent compared to the previous six months when 125 sales were completed on average each month.
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Other areas that have seen transaction levels plummet include Melton where levels have dropped by -42.4 percent, Wyre where levels have plummeted by -41.1 percent, West Oxfordshire (-40.5 percent), Newcastle (-40.2 percent) and Hambleton (-40 percent).
Areas that have seen levels drop by just below 40 percent include Copeland (-39.6 percent), East Lindsey (-38.9 percent), Boston (-38.5 percent) and Herefordshire (-38.4 percent).
Managing Director of House Buyer Bureau, Chris Hodgkinson, said it’s only a matter of time before house prices “start to fall”.
He said: “We’ve suspected for quite some time that the market was beginning to lose momentum following such a sustained period of heightened market activity.
“While there has yet to be any notable decline in topline house prices, we’ve seen previous signs that mortgage approvals were stuttering and we’re now starting to see this translate to a drop in transaction levels.
“This decline is only going to intensify moving forward, as the increased cost of securing a mortgage continues to climb to some of the highest levels seen in years.
“With more buyers being deterred from entering the market, sellers will start to find that they simply can’t expect to secure the same price as they would have during the dizzying heights of the pandemic market boom.
“As this pendulum shifts, there’s no doubt that house prices will start to fall and it’s only a matter of time before this decline surfaces.”
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