Halifax reports that annual house prices fell by 2.6% in June, as prices fall on monthly basis for third month running
FTSE 100 falls to lowest closing level in 2023 as interest rate fears grip markets
New figures from low-cost housebuilder MJ Gleeson this morning have confirmed the housing market slowdown.
Its subsidiary, Gleeson Homes, reports that house sales slumped more than a fifth year-on-year in the six months to the end of June, as first-time buyers struggled to get onto the housing ladder – while the number of older buyers doubled.
“Looking ahead, whilst the board believes that demand from first-time buyers will continue at the levels seen through the last few months, it anticipates that interest from other value-driven buyers will increase as purchasers look to take advantage of Gleeson’s more affordable price points and high quality.”
The reaction of financial markets to a series of upside surprises for inflation and pay growth has caused interest rate expectations to increase and this is feeding into higher mortgage interest rates.
“The rise in swap rates reflects markets’ view that the Bank of England will continue to raise rates significantly, with Bank Rate now widely expected to peak at 6.5% early next year. But the EY ITEM Club thinks an improving inflation outlook means the market view is too downbeat and that rates will stabilise after two further rises by the Bank of England. If that prediction is correct, mortgage rates should fall back during the second half of this year, albeit to levels still high by the standards of the last decade or so.
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