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Will the cost of living crisis affect house prices in Crawley?

Where are we now?

According to the Halifax, in April the average price of UK property was up 10.8% on the same month last

year, and the average cost reached a record high of £286,079, which is a result of the longest run of

increases since 2016. The recent property boom was fuelled by the Covid pandemic, and the first

lockdown in particular, so the housing market has defied economic conditions. It isn’t just Covid that has

been driving house price growth but also low interest rates, the stamp duty holiday, and the desire to

relocate and search for bigger homes with more space.

“Housing transactions and mortgage approvals remain above pre-pandemic levels, and the

continued growth in new buyer inquiries suggests activity will remain heightened in the short-term.

The imbalance between supply and demand persists, with an insufficient number of new properties

coming on to the market to meet the needs of prospective buyers and strong competition to secure

properties driving up prices,” said Russell Galley, the managing director of Halifax.

It isn’t just the cost of living that is squeezing household budgets but also mortgage rates. The gap

between house prices and earnings continues to widen, reports the Office of National Statistics (ONS).

With the average cost of a home in England rising from 2020 that saw 7.9 times earnings to an average

of 9.1 times earnings. As a result, home buyers are struggling to find larger deposits, thus forcing many

into staying in long-term rentals. Nationwide reports that seven in 10 have now put their plans on hold

for at least two years.

Where are we headed?

Things have started to slow, which is confirmed by the Halifax’s monthly property index which states

the rate of growth in April is down from March. “Even though there is a lot of caution about the

future economic landscape, it seems that limited supply available on the market, coupled with

steady demand growth, are still the overriding drivers of house prices,” suggests the latest RICS

Residential Market Survey.

Despite this increasing financial tightening, industry experts still believe that we are not headed for a

crash. At Inspire we are not expecting house prices to fall in Crawley but we do

think that the rate of growth will start to stagnate. Russell Galley, the managing director of Halifax

states: “The headwinds facing the wider economy cannot be ignored. With interest rates on the rise

and inflation further squeezing household budgets, it remains likely that the rate of house price

growth will slow by the end of this year.”

There is no doubt that your finances are under pressure this year, and one thing that we know from

the last couple of years is it’s hard predict. Rightmove’s Tim Bannister commented: “With so many

variables affecting house prices and affordability, it’s a reminder that the market is extremely

difficult to predict, and those looking to buy will be prioritising their own needs and what they can

afford rather than waiting to try and time the market.”

Where to be

We understand that you may have specific questions related to your home and personal

circumstances. Our team are always available – call 01293 582335 or email