Whilst fashionable to have a wild stab in the dark about what might happen to the housing market I’m afraid I can’t – yet. Everything changed with the mini-Budget but that was only two weeks ago. In April one group of financial prognosticators said they expected house prices in 2023 would fall nominally. Today (10th October) Capital Economics are predicting that house prices will fall by 12%!
What a difference a couple of weeks makes! Who could have known that the Chancellor would blow up the housing market? Who expected the current bunch of clowns in Downing Street could make you yearn for the last bunch? Call me old fashioned but if there’s one thing you want from predictions it’s that the expert provides you with a credible forecast and isn’t just a windsock telling you which way the wind is blowing.
As my old friend Ian Cowie observed “There are only two types of ‘expert’ when it comes to predicting house prices – those who don’t know & those who don’t know they don’t know.”
Interest rates were already rising and prices were already flat-lining month on month according to Nationwide before the Chancellor emptied his jerry can of a budget over the embers of the housing market. Rates are now expected to rise to 6%. Prices may fall by 15% but we have no actual data yet to confirm that this might be the case. Remember, most people thought that house prices would slump in April 2020 during the first Lock Down. Instead the rose.
“Prediction is very difficult – especially about the future” Danish nuclear physicist Nills Boor said back in 1922. I expect interest rates will go over 6% and I expect house prices nationally will fall next year by over 10% but really, my guess may as good (or bad!) as yours and is certainly just as likely to be right.