A house price crash in Bristol ‘has already begun’ with buyers ‘holding all the cards’, according to property market experts in the city. The warning came as the latest Halifax House Price Index figures were released, which Halifax said showed a sharp drop in the rate at which house prices were rising in the region over the past month.
While the average selling price of a house is still higher in November 2022 than it was in November 2021 in Bristol, the rate of that increase has slowed markedly. Independent mortgage broker Steven Morris, at the Bristol-based Advantage Financial Solutions, said prices were heading down. The Halifax House Price Index showed that in the South West, the average price a property sold for in November 2022 was £307,750.
That figure is still 8.4 per cent higher than homes were selling for in November last year, but the average selling price month-on-month has been falling since the summer. This means the price houses are selling for is starting to slow significantly, according to Halifax, which said the region had the ‘sharpest slowdown of annual growth’.
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“This is notable given the South West was a key hotspot of house price inflation during the pandemic, suggesting that previous drivers of the market such as the race for space and heightened demand for rural living are now receding,” a Halifax spokesperson said.
Nationally, house prices fell by 2.3 per cent in November, marking the biggest monthly drop since 2008, according to the Halifax index. The average UK house price in November was £285,579.
On the ground in Bristol, mortgage lenders said the price a house is selling for is already coming down, and has been for months. “Prices are heading down due to inflation and rising interest rates and this trend will almost certainly continue throughout 2023,” said Steven Morris.
“However, I would be surprised if average values dropped by more than 15 per cent given that inflation is forecast to normalise by 2024. A fall in prices greater than 15 per cent within a period of 12 months seems historically unfathomable.
“Currently, many would-be buyers are waiting until 2023 for a bargain. December, and to a lesser extent November, have always been the month for cheeky offers, as there are fewer buyers ahead of the Christmas break. That's nothing unique to 2022.
"However the cliff edge of purchase activity and the burgeoning wave of landlords now looking to sell in the face of a barren outlook for buy-to-let, means more 'cheeky offers' are making a home run than in previous years. Buyers, for now at least, hold all the cards,” he added.
Graham Cox, the founder of the Bristol-based broker, SelfEmployedMortgageHub.com, was even more pessimistic, predicting house prices would fall even further in Bristol.
“A house price crash has already begun in my opinion,” he said. “The ONS recently predicted a nine per cent fall in property prices over two years. And the rest.
“We're already a quarter of the way there in the past two months. There seems to be a lot of wishful thinking and self-delusion from vested interests, downplaying the severity of the falls coming. I think it's increasingly likely we'll see at least a 15 per cent decrease in 2023 and 25-30 per cent over the next two to three years,” he added.
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