Climbing loan rates could hit property price growth

Alexandra Goss in the Times looks at the property market, highlighting Nationwide data showing that annual house price growth rose to 12.6% last month and the average price has gone above £260,000 for the first time. Propertymark figures show 39% of properties sold for above the asking price in February, while analysis by Savills suggests the number of sales agreed in the first two weeks of March was 20% above pre-pandemic levels while the number of properties coming to market was 8% below. However, Capital Economics’ Andrew Wishart expects interest rates to hit 2% next year, warning that the average rate on new mortgages is set to double from a low of 1.5% in November 2021 to almost 3% in 2023. This, he suggests, is likely to cause demand and price growth to “slow to a crawl.” Gráinne Gilmore, head of research at Zoopla, forecasts average price growth of between 2% and 4% by the end of the year, with fewer transactions. 

The Times (18/03/2022)