What will house prices be like this time next year?

[Tequilasun]

Do you think prices will stay the same or go up or down. There is nothing new coming on the market where I am at the moment. Just wondering if next year will be any different? Hopefully we will be in a position to move next summer so just keeping an eye on things for now.

Nobody knows. Stock market dropped yesterday because people are worried inflation will lead to interest rates rising, if that happens prices might fall. On the other hand the bank of England has said it's prepared for minus interest rates if needed which will reduce the cost of borrowing and house prices might rise.

I'd be surprised if there was dramatic movement in either direction, the BoE seems keen to protect the economy from major shocks. There is still a house shortage that isn't going to be fixed anytime soon.

One thing I learned in NZ post GFC - if a central government decides to hold the housing market up, it will. And boy did it ever. Cheap money, government FTB grants, permitted deposit withdrawal from pensions, huge levels of new immigration and the active encouraging of foreign buyers. The residential property market rocketed and it was wonderful for those who had already bought. OTOH, it was a life ruining disaster for those who hadn't and couldn't buy.

This government have extended stamp duty cut, are about to reform stamp duty and council tax into one (same or not much higher for most of us) annual tax which will remove barriers to house movers and they're about to bring in 5% government guaranteed mortgages for FTBs.

The government are also bringing in high quality and (even moreso than us!) property mad immigrants from Hong Kong. This is reportedly already being felt in the property market, including the residential BTL market.

It's clear that this government has decided that the market will not fall. Time will tell whether the result of that looks like NZ's property market.

The Tories will do almost anything to support house prices.

There will be a regional variance, of course, but I would expect prices to be more or less the same overall.

I would guess there will be fewer properties for sale as people already on the ladder may sit tight and not overextend themselves to a bigger/posher/more expensive place.

Probably fewer new builds being started so rein in supply there.

In some hyper local markets, the lack of supply may boost prices in certain catchment areas or proximity to a station or whatever the hyper local factor is.

And yes, in theory a lot of fairly comfortably off Hong Kongers may be arriving from a culture that values owning property (and used to living in flats). That will mop up some of the new build flats that are just coming to the finish in the major cities so again potentially offset the fall in other foreign buyers.

The Tories will do almost anything to support house prices.

This. The demographic that's sitting in houses that have tripled in value in 20 years will vote for Boris or NewBoris. The current government give no shits about first time buyers and the size of deposit they need, for example.

The average age of the conservative voter was estimated to be 62 on the last election, needless to say more. So price steadily ramping up across London and the home counties whatever it takes for the government. The only caveat is if national priority becomes real economy concerned such as high unemployment, currency devaluation or lost of trust from the market to raise debt. All of which may lead to higher interest rate which is the single most important driver of asset price inflation