UK house prices will crash 8% next year Mortgage lender predicts

UK house prices will crash 8% next year Mortgage lender predicts

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·        House prices will plummet by 8% in 2023

·        Stay flat for the following four years, Lloyds Banking Group has predicted.

·        Britain’s biggest mortgage lender issued a pessimistic outlook for the UK economy

·        Setting aside £668m to cover bad debts.

·        The bank fear that rising interest rates – which they predict could reach 4% by 2024 - will make mortgages less affordable.

·        ONS data says price of the average home up by 13.6% in the year to August to £296,000.

·        An 8% fall will not put values below the rapid rises over the last two years.

·        The Bank of England hints base rates could rise by 0.75-1% when it meets in November as it fights to tackle 10% inflation.

·        Wholesale lending rates have eased after fixed rate mortgages topped 6% following the disastrous mini budget.

New buy-to-Let investment deals are no longer viable with 6%-7% mortgage costs even with a 25-30% deposit – see:

Higher interest rates will KILL buy-to-let property market

Cash buyers are unaffected by mortgage rates of course, but investors have traditionally used leverage and maximum borrowing to expand their portfolios, but higher rates have moved the goalposts.

The Nationwide has reported that UK house prices fell for the first time in over a year last month. Prices fell by 0.9% month-on-month in October.

Over 100,000 borrowers are reaching the end of their fixed rate deals every month at which time they will suffer sharp increases in payments. Many will face mortgage rises of 2-300%.

Britons are facing a long winter of strikes and higher energy and food prices, despite wholesale prices of gas and oil falling from their highs.

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