Michael Gove rants about mortgage pledges
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The strength of the housing market will continue as home builders will not be able to access mortgages without the impact of further rate hikes. For potential buyers who are "trying to change". But real estate agents hope the "imbalance" between housing demand and supply will be enough to prevent a large drop in home prices this year.
At the beginning of the month, the Bank of England raised the base rate to 1.75%. That's the sixth straight rise since cutting to a record low of 0.1% during the pandemic. Economists expect this he will be raised another 0.5% in September.
The interest rate hike is an attempt to stem a spike in inflation that rose to over 10% in July, putting huge pressure on the cost of living as well as pushing up mortgage rates.
The number of current property buyers could drop dramatically as household incomes plummet and costs and mortgage prices rise.
Average home prices fell 1.3% this month, but online real estate giant Rightmove warns that this is in line with seasonal trends.
28} READ MORE: Home prices plummeted, thousands wiped out the value of new homes 
Current economic conditions are affecting the housing market as property purchases take longer to complete. Impact may be delayed. Surge after Covid.
The UK is also still in the midst of a housing crisis, requiring an estimated 340,000 new homes per year to sustain supply. In March, Nikodem Szumilo, professor of construction economics at UCL, told Express.co.uk: ”.
Chronic demand for UK housing has meant that prices have increased by 60% over the past decade. However, the London housing market, where prices are twice the average for the rest of the UK, has grown the slowest, suggesting affordability is a key limitation of the housing market.
Charlie Huggins, Head of Equities at Wealth Club, an investment firm, commented:
But he argues that the current success of the market that has pushed home prices up is because the cost of buying a home cannot match what Britons can afford to borrow.
Mr Huggins said:
"When you combine that with rising interest rates, you end up with Mortgages could become expensive and real estate affordability could drop significantly.
"It's hard to see how the housing market will not be affected if interest rates continue to rise."
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Persimmon, a leading British homebuilder and he is a member of the FTSE 100, said demand for homes remains high. Despite this, it has so far "spouted cash". The company recently posted a pre-tax profit of £440m in the first half, during which he built 6,652 homes.
According to The Wealth Club, the cost of building a new home is rising with inflation, but is being moderated by sales prices.
Huggins warns:
"It is out of your control and may be about to change."
He added: I was. But with construction costs rising, home prices will need to continue to rise or margins will be squeezed.
"There is still enough imbalance to prevent a significant price drop this year," he said.
website real estate expert Tim Bannister said: Percentage of annual growth rate despite broader economic uncertainty.
However, this may be due to real estate agents impacting market growth, still showing slowing growth.
The Bank of England forecasts a slowdown in house price growth, and mortgage broker Wesley Davidson, founder of Fox Davidson, said in July that average house prices will continue to rise. In 12 months he predicts a 10% drop.
