·Finance Reporter, Yahoo Finance UK
Thu, 18 May 2023 at 2:39 pm BST
The “age of massive rises of house prices may be nearing an end”, according to the government’s spending watchdog.
David Miles, one of three members of the UK budget watchdog’s top committee, said that changing working habits, a flattening population and an end to a decades-long fall in borrowing costs make explosive house price growth less likely.
“Those forces driving them up are going to be much weaker, I suspect, in the next 40 years than they have been in the past 40 years,” he said in a speech at an Economic Statistics Centre of Excellence conference in London. “If anything, this unusual age of massive rises of house prices may be nearing an end.”
Slowing population growth and a rise in working remotely will likely mean that homes will appreciate less in value, according to Miles.
The average home cost £288,000 in February according to the Office for National Statistics, an increase of around 91% since 2005.
Meanwhile, the number of homes being repossessed and homeowners in arrears jumped in the first quarter of this year, according to figures from a trade association.
There was a 50% increase in the number of homeowner mortgaged properties being repossessed in the first quarter of 2023, compared with the previous three months, UK Finance said.
Some 750 homeowner mortgaged properties were taken into possession in the first quarter of 2023.
UK Finance said the increase in repossessions is from a very low base, as cases make their way through the courts.
The number of buy-to-let homes being repossessed also increased. UK Finance said that 410 buy-to-let mortgaged properties were repossessed in the first quarter of 2023, which was 28% more than in the previous quarter.