Home sales are stalling across the country as rising inflation is pouring cold water on the hot real estate market.
According to Halifax, house prices have been rising for almost two years, with the average home price now standing at 6 286,079, up 10.8% in the last 12 months alone.
High demand among buyers looking for more space, coupled with a shortage of supply, has sparked bargaining power, pushing supply far beyond demand.
But brokers say they now see lenders slowing down the cost of housing by tens of thousands of pounds.
In the last year, the average house has risen in price by 29,000 pounds, reaching a new record high of 267,620 pounds.
This means that banks և construction companies do not believe that the property is worth the agreed price, so reduce the amount they are willing to lend.
If buyers are unable to secure the mortgage they want, they will have to negotiate a cheaper price with the seller or raise extra cash to bridge the gap.
If none is possible և No other lender will offer a bigger mortgage, it could lead to the collapse of entire chains.
Experts warn that this may be the first sign that the post-epidemic property boom is coming to an end.
Emma Jones, owner of broker ld Alder Rose Mortgage Services, claims that about one-fifth of her clients now say that their property is worth less than the required price.
“In the last few months we have seen almost twice as many declines as before,” he said.
“It simply came to our notice then. And that’s something we’re seeing with the general holiday season.
The bank said the house cost ,000 35,000 less than our offer
Maria Ivanova’s dream house has depreciated by 35,000 pounds
Maria Ivanova desperately wanted to find a bigger home for her family of three. Her husband, Pavel Shveda, 43, owned a two-room apartment in Greenwich, London, where they lived with their seven-year-old daughter, Julia.
In February, they found a three-room mansion in Beckslith, priced from 40 440,000 to 60 460,000.
Maria, 33, who runs a pub, says: “We were told that at least two other spectators were interested in the house, so two days later we offered 5 455,000.”
However, their creditor reduced the property to 20 420,000.
Fortunately, after some negotiation, the sellers agreed to accept 7 427,000, and Maria և Pavel was able to pay an additional ,000 7,000.
Maria says. “I was shocked to learn that the rating is much lower than the required price.
“If the sellers did not agree to a lower offer, we would probably leave.”
Home price growth slowed last month to 1.1 percent from 1.5 percent in February to March, according to the latest Halifax figures.
And analysts at Capital Economics predict that prices will fall by 3% next year.
Experts note that the growing reports of a decline support the trend.
Dominik Lipnitsky, director of Your Mortgage Decisions, says: “It’s human nature that appraisers can be more cautious if they know there has been such a long period of house prices.
“If this is not a deviation, but a general trend, it could be a sign that real estate prices are going to slow down.”
According to a study by HBB Solutions real estate experts, Wales has been the region with the biggest decline in the last two years.
And that means a decline in 63 percent of all transactions.
Unrealistic prices. Brokers say they now see lenders braking, lowering house prices by tens of thousands of pounds
Carol Pitt, executive director of the West Wales Property Finders purchasing agency, who has worked in the area for 18 years, says buyers should make large deposits before bidding on homes in popular coastal cities, as it is difficult to bargain for price reductions.
He says. “It is not uncommon for 600 600,000 bids to depreciate by ,000 50,000 as bid wars lead to redundant bids.
“And for some real estate, the competition is so fierce that sellers know they can find another buyer who is willing to pay the price.
“One of our clients, who bought real estate with a beautiful view of the sea, reduced it by 45,000 pounds.
“Fortunately, I warned them that this was probably the case. They have a large enough cash deposit to cover the difference.”
“This is a big, serious obstacle for many people buying property in Wales, it leads to the collapse of chains.”
Kate Burns, founder of KB Mortgage Services in Huddersfield, says she has also seen a drop in value over the past two months.
One of his clients accepted a 300 300,000 offer for a four-bedroom house with a balcony in Halifax, but the lender said it thought it was worth just 0 270,000.
“At the moment, the buyer is trying to bargain for the price up to 287,500 pounds.
“They currently have a 2.29 percent mortgage with a 15 percent deposit, but if they borrow more, they will be charged a higher interest rate of 2.5 percent.”
Buyers with smaller deposits usually pay much higher interest rates. Mortgage rates are still relatively low by historical standards, but they are rising.
According to Moneyfacts, the average two-year fixed-rate mortgage now stands at 3.03 percent, up from 2.57 percent last year.
Last week, the Bank of England’s base rate rose to 1%, the fourth straight growth in five months, further raising the value of borrowing.
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Lenders are blocking apartment prices
SourceLenders are blocking apartment prices