Source: Money Week —
The latest data from the Bank of England (BoE) shows a growing number of people are questioning whether now is a good time to buy a house, adding more uncertainty to the property market’s outlook for 2023.
The BoE’s Money and Credit report showed mortgage borrowing fell from £4.3bn in November to £3.2bn in December as fewer people chose to jump on or up the property ladder, likely put off by rising interest rates and double-digit inflation. Mortgage approvals are now at their lowest level since May 2020.
The data reflects the after-effects of September’s mini-Budget, which spooked markets and increased the cost of borrowing.
In September, mortgage rates reached an eye-watering peak of 6.65%. They have since climbed down to around 5%, but with a further interest rate on the cards later this week it’s unknown whether they will continue to come down.
The base rate currently sits at 3.5%, but markets are widely expecting it to jump to 4% when the Monetary Policy Committee meets on Thursday.
Data from Halifax revealed UK house prices fell for the last four months of 2022 as the property market cooled following two years of explosive growth. Some analysts are predicting house prices could fall up to 30% this year.
