Bolton Estate Agent Harrisons on the housing market
House prices are rising rapidly in Bolton along with the cost of living but economists predict a drop in house prices in the next two years.
But Matthew Fish at Harrisons Estate Agents say he believes those looking to buy should not wait as the drop in house prices over the next 18 months will be too slow.
The Bank of England interest rates have increased four times in the last few months to try and combat inflation.
Meanwhile, many Bolton households are facing increased costs.
And some economists are predicting house price drops in the coming 18 to 24 months of three per cent to five per cent.
Real household disposable income is set to drop by 2.4 per cent in 2022/23, the largest drop since records.
And as interest rates increase, mortgage rates will increase in line, increasing mortgage costs.
But Matthew said: “I believe, subject to no significant shocks in the world economy, Bolton house price growth will be very slow in the next 18/24 months and go into low single digits), but not the 16 per cent to 19 per cent annual drop we saw in 2008/9.
“79 per cent of owner-occupiers have fixed their mortgage costs and had their affordability stress-tested to Bank of England interest rates.
“I believe the most significant impact of increasing interest rates will be at the point of taking on a new mortgage by first-time buyers, as opposed to servicing or the porting of an existing mortgage from one house to the next house.”
This means that once the held rate ends, most homeowners would then struggle to find the extra per cent to pay the higher interest rate while new buyers will start at this higher rate.
Matthew said: “So let’s assume that Bolton house prices do fall, irrespective of the reasons above, it will not inevitably help Bolton buyers.
“If we have a house price crash, people tend to find their careers are at risk, and their salaries don’t rise as much. The younger generation often gets hit the toughest by recessions.”