Predictions For Croydon’s Property Market

If 2022 proved anything, it proved that for an estate agent in Croydon, absolutely nothing can be predicted.

Whilst house prices in the area have remained largely similar over the past year, the surrounding market has changed in complexion dramatically, and with prices lowering nationally at a higher rate than normal, the latter half of 2022 has been anything but normal for the housing market.

Given that there have been three different Prime Ministers in as many months and several moments that have caused concerns for the property market, it can be difficult to predict what will happen to the prices of Croydon homes over the next year.

Here are some predictions.

House Prices Will Fall, But To What Extent Is Unclear

Ever since the catalysed housing market started to boom in the middle of 2020, house prices have soared exponentially, with record-high average prices set on a nearly monthly basis.

At some point, this growth was going to see a downturn, with a higher-than-expected December dip perhaps being the first sign of this. Exactly how bad it might be is still debated by experts, however.

Some, such as Rightmove, believe that prices will reduce by just ten per cent, whilst others have claimed a reduction of up to ten per cent to ensure that people can afford to buy a home as mortgage rates increase.

In any case, the one point they agree on is that the boom is likely to be at an end.

The Era Of Low Mortgage Rates Is At An End

At the end of 2021, the Bank of England’s base interest rate, which is the tether that SVR and tracker mortgage rates are set to, was just 0.1 per cent. A year later it is at 3.5 per cent.

This policy intends to reduce inflation, but increasing interest rates not only increase mortgage rates but also the effect of affordability stress tests that can price many people out of the market.

Whilst it remains to be seen just how high interest rates will go, the era of ultra-low mortgage rates is at an end.