Featured in this article: comments from Cebr Director and Head of Forecasting and Thought Leadership Kay Neufeld.
Nikki Kopelman and her husband James Bore bought their £420,000 home in 2019, securing a five-year fixed mortgage at a bargain rate of 2.5pc.
But the era of cheap money is now coming to a brutal end for Britain’s homeowners. Kopelman – and millions of other borrowers – are facing rate rises that to many will be simply unaffordable.
As a result, the housing market is in for a terrible reckoning – with some forecasters predicting that the impending mortgage catastrophe could trigger a crash the likes of which have not been seen since records began. Last month, Britain’s biggest bank Lloyds said prices could fall by as much as 35pc in the worst-case scenario.
And now that the dust is settling on a grim picture for the housing market, economists say that this should all have been foreseeable – and even avoidable.
More than a decade of unprecedented ultra-low interest rates was always going to come to an abrupt end.
And then there were the ill-advised policy interventions. Critics say a stamp duty holiday in the pandemic poured fuel onto an already red-hot housing market. The Conservative Government’s heavy tax burden is furthermore adding insult to injury for already strained middle-class households.