As we now think Bank Rate will peak at 4.50% next year as opposed to 5.00%, mortgage rates will be a bit lower in 2023. But ultimately, the surge in mortgage rates over the past year will leave the cost of buying a home with a mortgage exceptionally high, making a sharp drop in house prices inevitable. We think that both a significant fall in mortgage rates to closer to 4% and a 12% drop in house prices will be necessary for the housing market downturn to bottom out, which we doubt will happen before 2024.
UK Housing Drop-In (1st Dec.): Nationwide house price data is expected to confirm the start of the drop we’ve long been forecasting. But how far will they fall in this cycle, and how will that impact the broader industry? Register here to join this special 20-minute briefing with our UK Property team.
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