BOE’s Pill Says, UK Housing Market, Might Avoid Crash.

Huw Pill

Bank of England’s Chief Economist, Huw Pill, said the rate hike may cool prices in the UK housing sector but are unlikely to lead to a crash.

The BoE’s decision to raise borrowing costs at the quickest pace in 27 years yesterday is cutting in on the ability of buyers to afford mortgages. Pill further explained that the BOE is attempting to bring down inflation, which may increase to 13% this year.

He said, “We think there is some resilience there, and we’re not going to see the dramatic downturns we’ve seen in the past.”

There are signs that the bank’s actions are slowing down the runaway growth in property prices seen through the pandemic. Halifax, a mortgage lender, said earlier today that UK house prices fell for the first time in a year.

When asked about the impact on mortgages by the Sun newspaper after the hike, BOE Governor Andrew Bailey said, “it’s important to think about whether you will still be able to afford repayments if rates rise further.”

The slowdown is expected to mark the start of a material loss of momentum for the housing market, which boomed during the pandemic. Households across the income spectrum are now facing a brutal cost of living squeeze, with inflation set to hit more than 13% in the fall, and the strain is being made worse by sharply rising borrowing costs.

Tom Bill, head of UK residential research at Knight Frank and a real estate agent, said, “Negligible monthly declines in house price growth will get steeper. Mortgages have become noticeably more expensive in recent months, dampening demand as cheaper offers made earlier this year expire and people roll off fixed-rate deals.”

Leave a Reply

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us

Disclaimer

Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.