As UK mortgage rates soar, residential property prices could see dips of up to 10%: analysts

[LONDON] With mortgage rates in the UK rising sharply over the last two years – they are between 4 per cent and 6 per cent today, up from an average of 1.5 per cent in early 2021 – residential property analysts say they expect prices to fall by as much as 10 per cent over the next 12 months.

Those forecasts, however, should be seen in perspective. On average, house and apartment prices in the UK surged by 20 per cent from the start of the pandemic in 2020 and peaked in August last year. Since then, average prices have fallen by 4-5 per cent to around £282,000 (S$452,780), according to estimates by Halifax, Britain’s largest mortgage lender.

And there’s also a big question mark about how the British economy will fare in 2023. Both the Bank of England and the International Monetary Fund have said that there will be a shallow recession at worst.