Where next for house prices? Clearly, they’re going down as mortgage rates go up – and my forecast in May that they would shed ‘recent froth’ and then stagnate rather than plunge, has been entirely overtaken by events, or at least by Kwasi Kwarteng’s calamitous ‘fiscal event’ last month.
Reverberations from the Chancellor’s debut continue apace, with more emergency bond-buying by the Bank of England despite news that the OBR-assessed forecast missing from his September speech will now be unveiled on 31 October instead of on 23 November. But even if the books can be cooked in a way that makes more sense than markets expect, hundreds of mortgage deals have been withdrawn and average two- or five-year fixed offers have already moved above 6 per cent. The talk is of house-price falls of 10 to 15 per cent over the next year, which, given inflation equates to real-terms falls of 20 to 25 per cent, is akin to post-2008.
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