Crystal balls out - prediction for interest rates and market post Xmas 2026

[DecisionTime123]

I've just started a new job, broker says I'd be ok with 3 months payslips then he can get a new DiP for me (previously approved mortgage but I lost my last job).

What do MN posters think things will be like by January 2027? Higher interest rates? People on market giving up and withdrawing their listings? I'm looking freehold house in the South East, around £300-325k and I notice at £325k there's a glut of properties at the moment.

As I say, just looking for opinions to talk about on here.

Its pretty much a guarantee that interest rates will have increased and prices slumping..

I generally try to stay positive on most things but I think we're in for some troubles.

I can see borrowing costs rising and a corresponding squeeze on affordability that could put pressure on house prices.

We are mortgage free but my crystal ball says B of E keeping interest rates the same, possibly a quarter percent rise but no more and house prices staying stable/ even rising.

I think interest rates will go up but House prices will go down so it might cancel out in your favour

Rates up, prices down. Do you also have something to sell or are you a FTB?

Rates slightly up, prices slightly down.

But to take advantage of lower prices, you'll need to view lots, offer lots and thereby find out who really needs to sell. That is price discovery.

Assuming prices do decline, you can just expect a lot of irrational people to stay on the market, refuse to accept their home is worth less and not sell - assuming they don't need to sell. And these people cannot be reasoned with.

Higher rates and lower house prices is a positive!

Bond market runs house prices not the BOE, there is so much unsold stock now that prices rising would be very unlikely.

True, as long as the lower prices more than offset the increase in borrowing.

I for one thing the ultra low interest rates following the 2008 financial crisis were criminal. Cheap credit just inflate asset prices.

Inflating asset prices then getting more idiots to borrow even more for them keeps bankers in the style they deserve, we can"t have bankers not being well looked after can we, they are crucial to our well being.

Lenders will be even more cautious about valuations. We will hear of more instances where a Building Society will say ‘your purchase price is too high, we won’t lend that amount’. Happened to family member in June.
Also, El Niño and climate change will influence those with hot houses and no air conditioning opportunities sooner than we’d expect. Houses that are climate-proofed will be the exception to the rule and maybe grow in value - think how bungalows became premium priced.
The cost of diesel will be in the mix.

I’d still buy and sell but the mortgage multiplier on my salary might be something I’d be monitoring. So 4x my salary and not 4.5 x. That kind of thing

It's really regional. Listings are overtaking sales agreed in the south, but it's still the other way around up north.

Prices should continue to drop in the south east but may very well rise in the more affordable north.

Mortgage rates will rise for everyone as countries are getting called out on their debts - especially US and UK.

Maybe, some parts of the North have been static for years though?

According to zoopla and rightmove their prediction is there will be a 2% slump on prices, rates will def be higher in the new yr, the independant says inflation will hit 4.2% in jan and its currently 3.1%. So that will push up rates.