People looking to get a mortgage to buy a new home will probably have been well aware of the significant rise in house prices in the past couple of years, a process that began before the general surge in inflation across the wider economy.
However, economists and property experts have been debating whether this high rate of house price inflation will be curbed as the economy feels the effects of inflation, with the Bank of England raising base rates four times to reach one per cent for the first time since 2009 and warning of low economic growth or even a recession.
However, the latest data from the Royal Institution of Chartered Surveyors (RICS) has found that demand remained high in April and prices continue to rise. Ten per cent more respondents to the RIS survey reported an increase in enquiries than saw a drop.
At the same time, slightly more agents recorded a drop in listings than a rise, meaning the supply of new homes is still very tight. This underpins the plus 12 per cent net figure of respondents expecting a rise in prices in the next three months.
Beyond that, a majority of plus 62 per cent expect prices to still rise over the year ahead, albeit down from plus 78 per cent a month ago.
All this means many people will need expert advice on how to get a 6X salary mortgage as salary multiples increase.
Commenting on the findings, RICS economist Tarrant Parsons said that “even though there is a lot of caution about the future economic landscape,” the imbalance of supply and demand is still driving prices up and expectations going forwards have “only moderated slightly from recent highs”.
The RICS survey findings contradict the predictions of some experts, who anticipate the cost of living crisis will soon have a significant effect in at least reducing house price inflation.
For example, commenting on the Halifax House Price Index for April that was published earlier this month, managing director of the bank Russell Galley said; “the headwinds facing the wider economy cannot be ignored,” and will bear down on prices before the end of 2022.
