Home truths

5 September 2022

There was a gloomy Stock Market response at the end of last week after HSBC’s building sector analysts published a report suggesting the country is on the edge of a housing downturn, following the rises in mortgage rates this year.

The national press reported that shares of several publicly quoted housebuilders fell as the research forecast a “significant fall in housing demand” over the coming year, with a 7.5 per cent drop in house prices outside central London and a 5 per cent decrease in new-build prices.

A 15 per cent reduction is predicted for central London, compounded by the trend towards hybrid and flexible working.

However, to put this in some sort of context, the housing market’s performance hitherto has been astonishingly strong, with an approximate 25 per cent increase in values since the pandemic according to the Nationwide building society. So many homeowners will have done very well regarding the value of their property. 

And if prices do fall and a building slowdown occurs, perhaps it will have a silver lining. Less short-term demand could lead to material costs decreasing from their very high levels. Furthermore, if people decide not to move, they will very likely improve what they already have – leading to demand for the services of contractors and equipment from tool hirers. 

Photo: Taylor Wimpey