City property boss believes house price boom could end this year

THE boss of a Bristol property company believes the decade-long increase in house prices could come to an end in 2022.

Graham Cox, founder of the SelfEmployed Mortgage Hub, said he would be “surprised” if prices didn’t start dropping materially in a few months’ time.

He made the comments as new figures revealed the average UK house price in January was £24,000 higher than a year earlier.

New Office for National Statistics (ONS) data found house price growth eased slightly to 9.6% in January, from 10.0% in December, but over the year property prices had surged. The average UK house price in January was £274,000.

Average house prices increased to £292,000 in England (9.4% annual growth), to £206,000 in Wales (13.9%), to £183,000 in Scotland (10.8%), and to £159,000 in Northern Ireland (7.9%).

“It’s true that chronic undersupply of housing stock remains but it’s only insanely cheap credit that is underpinning demand, and we’re now moving to a much higher interest rate environment,” said Mr Cox.

“The cost of living crisis means lenders are already tightening their affordability criteria. People simply won’t be able to borrow as much, which means lower offers, particularly from first-time buyers.

“Put it all together, and I’ll be surprised if prices don’t start falling materially in a few months’ time.”

The comments follow a report by Halifax, which also said house price growth is likely to slow over the year.

Samuel Gee, director at Bristolbased Manning Gee Investments, told BusinessLive the current situation was “unsustainable”.

He said: “There is an unprecedented lack of stock currently, with buyers competing intensely for whatever comes to market. It’s an unsustainable situation with firsttime buyers simply priced out of the market.

“The cost of living crisis will only exacerbate this problem, as lenders will be more careful when taking longer term affordability into account.

“Something somewhere will have to give and interest rate rises could turn the current property bull market into a bear.”

According to Rightmove, the cost of an average home in the UK topped £350,000 for the first time in March.

Sellers were typically asking £354,564 for a property - 1.7% or £5,760 more than in February - the website revealed. It is the biggest monthly increase seen at this time of year since March 2004.