Business, Stock markets, FTSE, House prices Business | The Guardian
Rolling coverage of the latest economic and financial newsUK house prices dipped 0.1% in May, up 1.5% year-on-yearThe recent rise in mortgage rates is likely to prevent any meaningful pickup in transactions and prices in the short-term, predicts Peter Arnold, chief economist at EY UK.But Arnold also suggests we won’t see a new downturn in prices either… saying:“While 2023 was a challenging year for the housing market, data for the first half of 2024 has suggested that the market has passed the bottom. The substantial fall in mortgage rates since last summer, combined with strong growth in nominal wages, has reduced the scale of the mortgage affordability problem. This has helped to entice some buyers back to the market, leading to a recovery in transactions and putting a floor under prices.“Over the past couple of months, mortgage rates have edged up again in response to rising swap rates, as financial markets anticipate a slower pace of Bank of England interest rate cuts. This is likely to prevent any meaningful pickup in transactions and prices in the near-term. But so far, the increases have been small and mortgage rates remain well below last summer’s peaks. The EY ITEM Club does not expect to see a renewed downturn in the housing market.“After 14 years of Conservative government, the dream of home ownership is out of reach for too many hard working people. Despite doing everything right, they can’t move on and up. A generation face becoming renters for life.“My parents’ home gave them security and was a foundation for our family. As Prime Minister, I will turn the dream of owning a home into a reality.We will reintroduce housing targets, build on disused grey belt land, fast track permissions on brownfield and build the next generation of new towns. Continue reading…
Rolling coverage of the latest economic and financial news
UK house prices dipped 0.1% in May, up 1.5% year-on-year
The recent rise in mortgage rates is likely to prevent any meaningful pickup in transactions and prices in the short-term, predicts Peter Arnold, chief economist at EY UK.
But Arnold also suggests we won’t see a new downturn in prices either… saying:
“While 2023 was a challenging year for the housing market, data for the first half of 2024 has suggested that the market has passed the bottom. The substantial fall in mortgage rates since last summer, combined with strong growth in nominal wages, has reduced the scale of the mortgage affordability problem. This has helped to entice some buyers back to the market, leading to a recovery in transactions and putting a floor under prices.
“Over the past couple of months, mortgage rates have edged up again in response to rising swap rates, as financial markets anticipate a slower pace of Bank of England interest rate cuts. This is likely to prevent any meaningful pickup in transactions and prices in the near-term. But so far, the increases have been small and mortgage rates remain well below last summer’s peaks. The EY ITEM Club does not expect to see a renewed downturn in the housing market.
“After 14 years of Conservative government, the dream of home ownership is out of reach for too many hard working people. Despite doing everything right, they can’t move on and up. A generation face becoming renters for life.
“My parents’ home gave them security and was a foundation for our family. As Prime Minister, I will turn the dream of owning a home into a reality.
We will reintroduce housing targets, build on disused grey belt land, fast track permissions on brownfield and build the next generation of new towns.
