EP135: What's really going on with property prices? We decipher the data on the UK housing market

EP135 : Once again I'm joined by property expert Eyeedul Haque to discuss the recent data on the UK property market, with a focus on recent developments related to mortgage rates, inflation and property prices.

We discuss:
- Mortgage payments are set to increase by £500 for approximately 1m households.
- The Bank of England's interest rate has reached a 15-year high at 5.25%.
- Inflation stands at 8.7%, and the government aims to reach a 2% target.
- Effectiveness of the monetary policy in dampening inflation, noting that it might be causing inflationary pressures.
- Rental market is seeing significant rent increases due to rising costs in the economy.
- Prediction that interest rates will likely hit 6% by the end of the year, with some sources suggesting rates may reach 6.5%.
- Housing market is not experiencing a hard landing or freefall but rather a levelling off.
-  Continued shortage of new homes.
- New 100% mortgages aimed at first-time buyers suggest confidence.

Key moments:
1:37- Nicole asks about the proportion of the market represented by the 2 million mortgages affected by refinancing this years. Eyeedul explains that 2.4 million households with fixed-rate mortgages will be affected by the end of 2024, which is about a third of mortgage holders.
3:13 - Discussion about the recent increase in interest rates, reaching the highest level in 15 years. The Bank of England's efforts to control inflation, which stands at 8.7%.
4:54 - Eyeedul explains how rising interest rates impact various aspects of the economy, including rents, and predicts that monthly mortgage repayments on average will increase by £500.
7:42 - Rent prices have been increasing, with national rents up by 10% and London rents up by 14.6%. The trend continues with a 10% increase nationally and 9.3% in London.
8:24 - Speculation that interest rates could hit 6% or possibly even 6.5% by the end of the year.
9:50 - Despite some forecasts predicting declines, Eyeedul notes that actual house price decreases have been less severe.
11:22 - Eyeedul explains that the housing market may enter a flat phase for the remainder of 2023.
12:42 - The introduction of 100% mortgage products by some banks suggests confidence in the housing market's stability.
22:45 - Key takeaways: House prices are not in freefall, but rather experiencing a bottoming out. Rents continue to rise due to interest rates and inflation. Interest rate increases are expected to stabilise and peak.
23:47 - Predictions for the future: Eyeedul predicts that house prices will flatline for the remainder of the year, with opportunities for buyers, and advises investors to consider areas with more stable property values.
26:47 - Rental increases and capital value growth assumptions used for modelling, indicating a 5% annual increase for both.

My special guest is Eyeedul Haque, a seasoned expert on housing economics and  an insightful commentator on the trends shaping the current housing market. As an experienced property consultant, he has a steady finger on the pulse of market fluctuations and how they impact homeowners, particularly in relation to mortgage payments. His approach is rooted in real-time data analysis and clear, understandable insights, making him a trusted voice on promptly evolving economic scenarios. He applies this passion in guiding property buyers through the intricacies of market trends and property management.