In early 2023, most property forecasters anticipated a significant downturn in the UK housing market over the following two years. Halifax predicted an 8% drop in house prices, Savills went further at 10%, and Nomura Bank predicted a fall of up to 15%. While these gloomy forecasts grabbed headlines, the actual data tells a different story. According to the Land Registry …
UK house prices are 1.76% higher today than in January
2023, and Huddersfield house prices are 7.7% higher.
Now, as we are halfway through 2025, many are asking the
same question again: will house prices crash this year? Based on current data
and trends, the answer is no.
The first thing to note is that although there have been
some slight dips in the national averages in early 2025, the falls have been
modest. Nationwide reported a 0.8% drop in June (the most significant monthly
dip in two years), and the Land Registry figures for April showed a 2.8% annual
fall. However, this needs to be put into context. These figures follow a period
of exceptional growth during the pandemic years; one shouldn’t expect the
market to collapse, and it is now normalising rather than collapsing.
Rightmove, which tracks asking prices rather than completed sales, reported a
0.3% drop in June, citing an increase in supply and fading of the stamp duty
boost.
Also, Denton House Research uniquely track the £/sq.ft
figures at the sale agreed date in the UK. The £/sq.ft figures track the Land
Registry five months in advance with a 98% correlation. This means we know what
will happen to the published Land Registry house prices five months in advance
with a very high level of certainty. Five months ago, the pound per square foot
for UK home sales agreed was at £338.67, and today it stands at £346.25 per
square foot. Therefore, based on this calculation, UK house prices should be
2.24% higher by January than they are today. None of these points point to a
crash.
Looking at the total number of property sales in
Huddersfield …
In the first six months of 2024, 1,631 Huddersfield homes
were sold subject to contract. In 2025, the figure climbed to 1,682 ... a sign
of growing confidence in the market.
Huddersfield – HD1-HD5, HD7-HD8.
In fact, at the start of the year, most forecasters expected
prices to rise moderately this year. Savills and the HomeOwners Alliance both
project growth of around 4% in 2025. Zoopla has forecast a more cautious 2.5%
rise, and Knight Frank predicts a similar increase. Capital Economics
anticipated average house price growth of around 4% per year between 2025 and
2027. The consensus across the industry is for stability or a modest recovery,
rather than a dramatic decline.
A key reason for the relative resilience of Huddersfield
house prices is the low mortgage rates.
After climbing to over 6% in 2023, rates have stabilised and
are expected to continue to fall gradually through 2025. Many lenders have
already dropped their fixed-rate deals below 4.5%, and further reductions are
likely if the Bank of England continue to cut its base rate later in the year.
This shift in affordability is expected to improve buyer sentiment and support
price levels.
Crucially, the UK labour market remains strong. Unemployment
is low, currently sitting at around 4.6%, and wage growth is holding steady at
5.2% per year. This means that most households can manage their mortgage
payments, even with higher interest rates. There is little sign of the kind of
financial stress that forces mass sales or repossessions, which typically
precede major house price crashes.
Another critical factor is the increasing regulation of
mortgage lending over the past decade. Since the introduction of the Mortgage
Market Review in 2014, borrowers have had to demonstrate that they can afford
repayments at interest rates significantly higher than those they are currently
paying. This stress testing was designed to create market resilience, and it
has been effective. Even at the height of ultra-low rates, new borrowers had to
demonstrate that they could afford repayments of 6.5% or 7%. Now that rates
have risen, most are already well-equipped to manage the change. The average
stress test rate in 2024 was 7.5% to 8%, and borrowers continue to pass these
checks.
There’s also more balance in the Huddersfield
property market.
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