House sales set to tumble on recession jitters

JACK BARNETT

HOUSE sales are set to tumble due to owners waiting until the recession passes to cash in on their homes, estate agents have predicted.

Homeowners are expected to adopt a wait and see approach during the first six months of 2023 for fear they will have to sell their property at a lowerthan-demanded price.

Higher mortgage rates caused by the Bank of England hiking borrowing costs nine times in a row to tame the worst inflation surge in 40 years has priced would-be buyers out of the market.

That means sellers may have to lower prices to attract bidders.

According to data provider Moneyfacts, the average rates on typical twoyear and five-year mortgages have more than doubled over the last year.

Matthew Thompson, head of sales at estate agent Chestertons, said: “Despite the uplift in viewings and new properties coming onto the market in December, we have noticed that there are fewer people looking to sell in the first part of this year, with many preferring to wait and observe how the market develops.”

Home sales have been slowing since last summer and dropped to just over 108,000 in December, numbers from HMRC yesterday showed.

Other data indicates home sales are likely to fall sharply over the coming months.

The Bank of England said mortgage approvals collapsed around a third in November, mainly triggered by UK borrowing costs skyrocketing after Liz Truss’s disastrous mini-budget.

Bank governor Andrew Bailey and the rest of the monetary policy committee are expected to raise interest rates again next Thursday by 50 basis points, piling more pressure on the housing market.