Fears of stumbling house prices heightened due to remote working
Fears of stumbling house prices in the year ahead have been heightened by suggestions that the move to remote working may mean permanently lower property prices.
The Halifax has forecast that house prices will rise just one per cent this year – a painful real-terms fall at a time of 4.6 per cent inflation.
Now some believe the market may stabilise at a permanently lower level in the medium term as a result of an increase in the number of people who are working from home.
Stumbling?: The Halifax has forecast that house prices will rise just one per cent this year
Price rises in newly desirable areas may not be sufficient to offset the decline in values in traditionally sought-after regions – such as the Home Counties.
Dhaval Joshi, chief strategist at independent consultancy BCA Research, said: ‘If the declines in some areas are greater than the rises in others, then it would be a negative-sum game.’
The Halifax said prices jumped by eight per cent in 2021 after a six per cent rise in 2020. Halifax managing director Russell Galley said that defied expectations.
Nationwide said Wales was the strongest performing region with prices up 15.8 per cent in 2021. The mutual’s chief economist Robert Gardner said price growth has outpaced income growth by a significant margin since Covid-19, meaning housing affordability is less favourable than before the pandemic.