Fueled by a post-lockdown buying frenzy, the average UK house price hit a record £275,000 in December, a £27,000 increase on the previous year’s high. People buying houses for the first time benefited from cuts to taxes on their purchases and even though homes were more expensive, rock-bottom mortgage rates kept monthly payments affordable. The sharp and sudden increase in mortgage rates that followed has made it much more expensive to buy a house, leading some forecasters to predict a 10%-15% plunge in prices over the next year. Even though Kwarteng and Truss are out, along with most of their tax cuts, mortgage rates have still not fallen back to where they were before the pair unveiled their doomed economic plan.
Is this the fall of the successful property industry? What should investors now be looking out for?