Will there be a house price crash? | The Sun
HOUSE prices hit a record high in October despite recent turmoil in the mortgage market.
The average asking price on a property hit £371,158 in October, according to Rightmove, with a number of factor driving the growth.
The property website said shortages of property for sale continue to underpin prices.
And the impact of the mini Budget which has pushed up mortgage rates has yet to be reflected in the property market.
The rapid rise in average mortgage interest rates in recent weeks has caused some potential home movers to pause their plans and wait to see what happens.
Winter will see costs squeezed too for homeowners and first-time buyers alike, with the price of bills and everyday essentials like food to keep on rising.
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So with all this going on, what does it mean for house prices, and will there be a crash any time soon?
Will there be a house price crash?
The last time property prices crashed was in the global financial crisis.
UK house prices reached an average of £190,032 in September 2007 and had dropped to £154,417 by February 2009 – a fall of more than 18%.
They did not regain that peak until August 2014.
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As we mentioned above, the average asking price on a property hit £371,158 in October, according to Rightmove.
That' s an increase of 0.9%, or £3,398, on September and a 7.8% increase on the same time last year.
House prices can fluctuate from one month to the next by small amounts, and based on the season, for instance demand can drop over Christmas pushing down prices.
And of course, no one can predict for sure what will happen to house prices, but here's what experts say is going on the market right now.
Tim Bannister, Rightmove’s director of property science, said: "What’s going to happen to house prices is understandably on the minds of many home-movers right now, especially following the market uncertainty after the government’s mini-budget.
"There has been no immediate effect on prices, but the trend of a slight softening in the pace of growth continues.
"New sellers coming to market in the month have been pricing strongly, and the number of homes that were already on the market seeing a reduction in price is still well below the long-term average.
"It will take a bit of time for the market to settle in to a new, more ‘normal’ level of activity following over two years of market frenzy, especially with new developments happening almost daily at the moment."
A cut to stamp duty by the government could boost house prices.
When ex-Chancellor Rishi Sunak slashed the tax on properties to kick start the housing market after the coronavirus lockdown.
It created a mini-boom, pushing up house prices by 8.5%, on average according to the Office for National Statistics.
And Chancellor Jeremy Hunt confirmed that the previous cut to stamp duty will remain in place, despite reversing a number of measures put forward in the mini-budget.
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Our mortgage payment calculator can help you work out how much you can afford to borrow to buy a home.
And our My First Home series reveals each week how first-time buyers have got a foot on the ladder – like the two best friends who teamed up to buy a £505,000 first home.
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