It has been a long time coming, given that shares and bonds have been falling for most of the year, but this morning there are the first signs of a slide in house prices. Don’t get too excited: the Halifax House Price Index fell by just 0.1 per cent month on month, and prices are still up 11.8 per cent year on year.
But it is an indication that things might finally be changing in a market which has seemed to defy logic ever since the arrival of Covid. Yes, the deepest recession in recorded history was accompanied by a boom in house prices. Even when interest rates began to rise, still the housing market powered ahead.
With the Bank of England sanctioning a chunky 0.5 per cent rise in interest rates yesterday, it is hard to imagine that house prices are going to resume an upwards trajectory any time soon.
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