UK house prices might drop by as much as a fifth as the recession bites in the UK, according to the founder of property website Rightmove.
Speaking to the Mail on Sunday, Harry Hill warned that the recession could be deeper than some fear in 2023 and lead to a dramatic decline in the price of property.
He said: “My view on the housing market is that it's going down in every direction. Transactions are going to go down. Prices are going to go down.”
Mr Hill added that the “only question” was how bad it would be, suggesting that an intuitive view is that it will be by double figures and perhaps as much as 20 per cent.
He predicted this would all bring a lot of problems for existing homeowners, with 1.8 million people will face higher prices as a result of having to refinance their mortgages next year. However, not many will fall into negative equity after what Mr Hill called a ”brilliant run” of rising house values in recent years.
While a large price fall may cause many a lot of problems, first time buyers whose jobs and incomes are not at risk from the recession would be significant beneficiaries and this could be a good time to speak to a mortgage advisor in Derby. While mortgages interest rates have risen and may do so again in the coming months, this could be counterbalanced by falling prices.
Mr Hill’s predictions of a fall of up to a fifth may be more dramatic than those of other commentators, but house prices declines are expected across the industry.
Nationwide’s House Price Index figures for November showed prices are clearly falling, with a monthly drop of 1.4 per cent, the largest seasonally-adjusted drop since June 2020.
The building society’s chief economist Robert Gardner said that the outlook remains “uncertain” as it depends on the wider performance of the UK economy, but noted “a relatively soft landing is still possible”.
