Whispers of Recession Places Housing Market at Risk

20 September 2022

The Bank of England has warned the UK about a potential recession later this year and we take a look at how it may affect the housing market.

Inflation hit a double-digit, 40-year record high at 10.1%, casting doubt on the plausibility of tax cuts promised by newly appointed prime minister, Liz Truss.

The cost-of-living crisis has already affected so many, with soaring fuel, energy, and food prices making people rethink and rebudget their finances.

Now, the Bank of England has warned of a potential recession as a direct factor of these rising prices.

Though during the height of Covid we saw a property boom, with buyers and sellers engaging in a race for space, the aftermath may not be as positive.

If employment remains steady, the recession could potentially decrease house prices, helping people join the property ladder, but monthly mortgage payments could see a steep climb.

The biggest risk for homebuyers during a recession would be potentially losing their job and being unable to keep up with monthly mortgage payments. With Covid-19 making a large percentage of Britons redundant, or on a lower income due to being furloughed, the fear of committing to a large financial outgoing is still present.

We know that getting your finances in order may seem like a daunting task, however, we are here to help.

Over the years, we’ve seen the ebbs and flows of the housing market, so we aren’t strangers to how quickly things can change. Our expert agents and mortgage advisors are on hand to talk to you, about whatever your mortgage needs and to help you find one that works for you.

Our mortgage calculator can also help you plan your next steps when you’ve found your ideal home. Just put in how much you’d like to borrow, for how many years and then get in touch with us to find out how we can help!