According to the latest estimates from the Yorkshire Building Society (YBS), the number of people taking the first step up the career ladder has fallen by about 9 percent over the past year.
Startups have dropped from 405,320 in 2021 to 370,287 last year, according to YBS analysis.
While new home buyers are expected to decline overall in 2022, new home buyers are likely to account for more than half (53%) of all home mortgage purchases last year. 50 percent is a clear sign of continued strong demand.
Nitesh Patel, an economist at the Yorkshire Building Society who prepared the forecast, said the “financial event” of Kwasi Kwarteng-Leese Truss was a turning point.
“Year [2022] began much as 2021 ended, with a significant supply of low-deposit mortgages, an abundance of healthy deposits from accumulated household savings during the pandemic years, and a stable economic picture.
“Followed by the notorious mini-budget, which caused a panic in the mortgage market, which led, among other things, to low food availability, higher loan costs and slowing house prices.
“These factors, combined with the lack of a stamp duty holiday last year, could mean this latest forecast comes as no surprise, but it shows demand from new buyers remains strong even as home prices fall most of the of the year. . are at historical heights. .”
He said the housing shortage at all stages of home ownership will continue until 2023 “to keep house prices going up.”
YBS calculations were made using data from industry body UK Finance through October 2022, with transactions for November and December estimated by YBS.
Halifax predicts that UK house prices will fall by 8% over the next year, although this fall will not be enough to undo all the gains of recent years. The National Building Society expects house prices to fall by about 5% through 2023.
A report by the Intermediary Mortgage Lenders Association (IMLA), whose members lend to buyers through brokers, predicts that higher interest rates will cause gross mortgage lending to fall to £265bn by 2023 and £250bn by 2024, depending on burden on the economy. shop.
Imla predicts that the number of households with negative equity – where a house or apartment is worth less than the mortgage – will reach 16,000 by the end of 2024, with an average negative equity of £4,300 per household.
This contrasts sharply with predictions by other experts who draw comparisons between today and the housing crisis of the 1990s, when up to 1.8 million households had negative net worth.
The Imla report says fewer people will be affected by the problem due to a lower share of loans with high loan-to-value ratios, rapid post-pandemic home price growth and more mortgages with amortization of principal, meaning more borrowers are paying their debts. mortgage Loans repaid.
Kate Davis, chief executive of Imla, said: “After two years of global economic turmoil caused by Covid-19, many expected 2022 to be a year of recovery and a return to stability. However, the new normal seems uncertain as Russia’s invasion of Ukraine has triggered a spike in energy prices and political unrest in the UK has directly affected mortgage rates.
“Looking ahead, significant challenges remain for the mortgage industry and the broader economy.”
Sie fügte hinzu: „Wir erwarten eine anhaltende Inflation und die Reaktion der Bank of England, um den Markt zu belasten, was sich auf die Kreditvergabe auswirkt, da Käufer sich entscheiden, mit dem Umzug zu warten oder in eine Immobilie zu investieren, um sie buy.”
Source: I News
I am Moises Cosgrove and I work for a news website as an author. I specialize in the market section, writing stories about the latest developments in the world of finance and economics. My articles are read by people from all walks of life, from investors to analysts, to everyday citizens looking for insight into how news will affect their finances.