The news comes as interest rate hikes have caused the market to react accordingly, and a big slowdown in the economy is expected. The financial uncertainty has been caused by multiple contributing factors, ranging from the war in Ukraine, the energy crisis and post-pandemic recovery costs.
Last year, homeowners were offered more than 20 percent more than the market value of their homes, but now they are rushing to sell before the expected collapse in prices.
One of the main reasons for the collapse in prices is the increase in the cost of mortgages, which fall in line with the increase in interest rates by the Bank of England.
According to the institution, interest rates have risen in an attempt to reduce inflation rates.
The Bank of England states: “It is our job to keep the UK inflation rate low.
“We have a target of 2 percent.
“It’s higher than that right now.
“That is mainly due to two things: higher prices of goods that come from abroad and large increases in the cost of energy.”
Interest rates rose sharply in the UK, from 0.5 percent in February to 1 percent in May.
According to one expert, the fall in house prices has been brewing for a long time.
Several signs have pointed to the inevitable becoming a reality.
Journalist Isabelle Fraser said: “So far, the market spike is visible in small but important signals.
“Online property searches have plummeted to their lowest level since the real estate market closed.
“There has also been an increase in ‘low valuations’, when a bank doesn’t believe a property is worth the amount agreed upon between the buyer and seller and doesn’t lend the full amount.”
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Simon English, a buying agent in London and the home counties, said: “There has been a remarkable increase in the number of properties available since the interest rate rose.
“That’s partly because it’s a traditional time to sell a house.
“But there are a number of houses around the £1.5m mark that I was told they wouldn’t come up for sale until the autumn that are now listed.”
However, not all industry professionals are so pessimistic.
Speaking to Express.co.uk, Yasser Elkaffass, managing director of Adam Hayes Estate Agents in Finchley, north London, said: “I think accident is a crazy word.
“I think demand is still strong and a small interest rate increase won’t make much of a difference to an average mortgage.
“The properties that were reduced were those that tested the market, and may not have reflected the actual price or value when they were first listed.
“So it may not be the pessimistic scenario that was predicted.”
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Elkaffass continued: “As long as the houses are realistically priced, there is potential for sales.
“There may be a small correction, but certainly not a crash.
“There is a shortage of properties on the market right now.
“We haven’t reached 5 percent interest rates yet, but 1 percent is still low and so I don’t agree with some perspectives.”