Santander has warned that residential property prices look set to fall back to 2021 levels, amid weaking housing market conditions.
The high street lender is predicting a 10% drop in house prices this year as interest rate increases adversely affect homebuyer demand and cause a 1.3% contraction in the wider UK economy over 2023.
Santander said mortgage borrower arrears remained low so far, but it saw a small number of business customers defaulting during the tail end of last year.
The lender has revealed that around 400,000 of its borrowers are due to come off fixed-rate deals in the near term, and they are expected to face a £313 increase in repayments a month on average, while the bank has also seen energy bills double year-on-year for around 900,000 of its customers.
Santander secured a £9.8bn rise in net mortgage lending over 2022 – a significant rise on the £7.5bn seen over 2021, but said there was a “marked slowdown” in demand for new loans in the final three months.
“We expect house prices to fall back to 2021 levels over the year ahead as higher base rates dampen demand,” a Santander spokesperson said.
Note to Santander ‘and other lenders’.
Why don’t you stop trying to manipulate the market with negative statements and remarks, whilst also manipulating the market by getting surveyors to undervalue. Allow the market to settle and find its own even keel ‘which will differ dependant on location, condition’ Quality etc’.
Trying to predict what may or may not happen in a negative financial / political climate but where housing demand still outstrips supply due to decades of under investment in social housing isn’t helpful…
The housing / property crisis is born out of successive governments / councils failures to investment sufficiently in the housing infrastructure! (Just Like the NHS and other primary infrastructures) Prices increase due to demand bolstered by the natural increase in value.
Rant Over!
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