House Prices Dropping In Many Areas As Recession Looms and Mortgages Cost More

8th November 2022

A spike in the cost of mortgage borrowing could cause the UK property market to crash, with analysts forecasting house prices could drop by up to 15% next year.

The market has been overheated, with property prices increasing by an average of over 10% over the past year.

But lenders have warned of a slowdown. Building society Nationwide said average prices fell for the first time in 15 months in September 2021, in response to economic turmoil sparked by Truss' government's mini-budget.
Read more at The Times
Read more at The Times

LLOYDS TSB ON SCOTTISH HOUSE PRICES
According to Lloyds TSB, Scottish house prices have dropped by 3.7% over the last three months.
The average Scottish house price was reported within the bank's house price monitor at £152,565, almost the same level as early 2007.
Chief Economist for Lloyds TSB Scotland Donald MacRae commented: "The Scottish housing market has adjusted to the recession with a halving of sales and a period of volatile price movement over the last three-and-a-half years. Average house prices in Scotland are now only marginally up on the levels of four-and-a-half years ago."

SCOTTISH HOUSE PRICES SLUMP CONFIRMED BY S1HOMES AND ESPC
A recent collection of price data from s1homes and new research from the Edinburgh Solicitors Property Centre (ESPC) seems to support the views offered by Lloyds TSB with the ESPC reporting that almost two thirds of properties within the East of Scotland have sold for less than the Home Report valuation. The number of people looking to sell also continues to outstrip the number of active buyers meaning the balance of power in negotiations remains firmly with the buyers.
David Marshall, business analyst with ESPC said, "About 15% of sellers are choosing to market their home below valuation when it first goes on the market which reflects the level of competition in the market. Additionally, when it comes time to negotiate on price the balance of power clearly favours the buyer. In the majority of cases the difference between the selling price and the valuation is relatively small - typically under 5% - which indicates that both buyers and sellers have a level of confidence in the valuation."

RICS ON SCOTTISH HOUSE PRICES AND MORTGAGE DIFFICULTIES
Graeme Hartley, director of The Royal Institution of Chartered Surveyors went on to say, "It is no surprise that many properties, especially at the lower end of the market are selling for an average 5% less than the Home Report valuation. Some potential buyers are still having problems getting a mortgage and raising a deposit. Those with finance will want a 'bargain' and may not be prepared to pay the full valuation. Sellers need to be realistic about the price they can achieve for their property. The valuation in a Home Report should be seen as a guide to what a property may achieve: for some it will be higher, for others it will be lower."

Guardian
Lloyds bank predicts 8 percent fall in house prices as its profits tumble

Press and Journal
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