June 18, 2024

South West News

South West News from Gloucestershire to Cornwall

image for indemnify - source Canva

“If this cycle continues for too long we will enter dangerous territory”, warns property expert

HOUSE PRICES are likely to continue to fall next year, a leading property expert has predicted.

Jonathan Rolande, from the National Association of Property Buyers, said many will celebrate the plummeting price to buy a home.

But he warned the market is now entering “dangerous territory”.

Mr Rolande said: “I suspect house prices will continue to fall in many areas next year.

“But people should be careful what they wish for. House price inflation at its previous rate was, of course, unsustainable. It caused a huge imbalance in the market, with many non-homeowners losing hope of ever being able to afford a property of their own

“Redressing the balance towards buyers again restores some fairness. But it won’t just be homeowners who are hoping that a better market bounces back in the New Year.

“A property market that loses value is bad for more than just those hoping that their nest egg goes up in price. A downward spiral can gain its own momentum as prices fall and consequently, buyers become more reluctant to buy and lenders to lend, fuelling the downward trajectory. If this cycle continues for too long we will enter dangerous territory. It would be very bad news for the wider economy which is intertwined with the property market.

Mr Rolande’s comments come in the wake of a report which revealed

homebuyers are in the strongest negotiating position for five years.

New research shows an average £18,000 has been knocked off asking prices with the average discount on a house purchase reaching its highest since 2018.

The stats are a further sign that it remains a “buyer’s market” despite the long-term shortage of homes in the UK.

Research by the property website Zoopla showed the average discount to asking price for completed sales grew to 5.5% in the first half of November, up from 3.4% across the first half of 2023. The discount was even greater in London and the south-east of England, at 6.1%, which equates to £25,000.