Major Banks Are Upbeat On House Price Growth

Despite rising inflation, interest rates and general cost of living, Barclays and a handful of other banks are predicting that house prices in the UK will continue to grow.

Barclays said on Wednesday that while higher interest rates are expected to adversely impact housing markets in major economies, house price growth should remain “positive over the forecast horizon.”

The day before, HSBC announced their forecasts stating that the most likely scenario was for UK house prices to keep rising over the next two years.

Additionally, the chief financial officer of Santander told Bloomberg that he does not expect to see significant UK house price drops in the coming years. “Provided the labour market remains strong, we believe that house prices will hold relatively well,” Jose Garcia Cantera said.

A new Prime Minister and cabinet have strengthened the pound vs the Euro and US Dollar, giving the money markets more confidence, with interest rate predictions for June 2023 down from around 5.8% to just under 5%, meaning greater affordability for buyers.

Whilst I’m convinced that house prices will level out over the coming months, moderate growth is possible, though nothing like we have seen over the past two years. Prices going from a nationwide average of £246,424 in April 2002 to £304,867 in June 2022 (a 23.7% rise) is an unsustainable rate stretching affordability for the average buyer.

Time will tell, but I will keep you updated on the market over the coming weeks and months.Despite rising inflation, interest rates and general cost of living, Barclays and a handful of other banks are predicting that house prices in the UK will continue to grow.

Barclays said on Wednesday that while higher interest rates are expected to adversely impact housing markets in major economies, house price growth should remain “positive over the forecast horizon.”

The day before, HSBC announced their forecasts stating that the most likely scenario was for UK house prices to keep rising over the next two years.

Additionally, the chief financial officer of Santander told Bloomberg that he does not expect to see significant UK house price drops in the coming years. “Provided the labour market remains strong, we believe that house prices will hold relatively well,” Jose Garcia Cantera said.

A new Prime Minister and cabinet have strengthened the pound vs the Euro and US Dollar, giving the money markets more confidence, with interest rate predictions for June 2023 down from around 5.8% to just under 5%, meaning greater affordability for buyers.

Whilst I’m convinced that house prices will level out over the coming months, moderate growth is possible, though nothing like we have seen over the past two years. Prices going from a nationwide average of £246,424 in April 2002 to £304,867 in June 2022 (a 23.7% rise) is an unsustainable rate stretching affordability for the average buyer.

Time will tell, but I will keep you updated on the market over the coming weeks and months.