According to Simon Chalk, mortgage planner at Mortgage Portfolio Services, conversations he has had with brokers and estate agents have found that the prices for recently built three-bedroom homes were starting to decrease.
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Chalk said: “Some property prices are starting to go down, with new build properties suffering the most. Anecdotally, people have been pricing these three-bedroom homes well above what they are worth, with one person saying to me it’s laughable some of the amounts being asked. I’m convinced we’re getting stuck in the mud, especially around the Stamp Duty thresholds, and further interest rate rises could see a correction.”
Family homes have been one of the highest areas of demand in the market due to their limited availability in many locations.
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Therefore, Richard Sexton, business development director at e.surv, admitted he was surprised it was this type of property that was seeing prices come under pressure.
“The focus for many people looking for signs of a price correction would be on two-bedroom apartments and other new build properties demanded by buy-to-let, which are the big concerns as to over-valuation. Obviously all trends are geographic but I’ve not seen any clear signs of a correction. Further interest rate rises may change this though.”
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Jim Gillespie, principal at Independent Financial Services, added: “The South East may see a correction but outside of that, prices will probably just stabilise. In the North East, we’ve seen 10 per cent year-on-year price growth and this is unsustainable. The impact of further rate rises and Home Information Packs will put pressure on prices but I don’t see a crash.”
