Amid the anticipated rise in interest rates, Jonathan Rolande of House Buy Fast warned of a market crash in the next decade. While wages have stagnated for an extended period, house prices have continued to rise, with Halifax reporting the average cost of a house at £ 262,954 this year. However, the National Association of Property Buyers has commissioned an investigation which found property prices could reach £ 290,700 next year.
In the midst of these sky-high prices, Mr. Rolane said Express.co.uk that a real estate crash over the next decade has now become “probable”.
He said: “I would say yes, it is likely.
“But maybe that’s for some reason we haven’t seen yet as you know, we haven’t seen to see Covid or the 2008 credit crunch.
“Or, you know, huge interest rates in 1991.
“I think it was under John Major when interest rates went up 15% overnight.
“So yes, it will be for some reason we can’t predict.
“If it were not affected by external events, a terrible disaster, the prices would continue to rise more and more.”
Far from a real estate crash, the sector also faces the imminent threat of a sharp rise in interest rates.
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A leap of such magnitude that we had not seen since before the 2008 real estate crash.
For this reason, some lenders have already increased mortgage payments.
Barclays raised its two-year fixed rate from 1.17% to 1.52%, raising the cost of a typical £ 200,000 mortgage by almost £ 400 per year.
These high rates will hit those on variable rates in the future.
Laura Suter, of AJ Bell, said: “Mortgage providers don’t lag behind when it comes to passing on rate hikes, so anyone on a follow-up deal will see their costs go up immediately.