Mortgage approval dropped.

Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said the average mortgage rate would probably soar to 6 per cent at the start of 2023 and that mortgage approvals would continue to fall as the squeeze on real incomes intensified. As a result, he forecasted that UK house prices would. As a result, it loses 8 per cent in the next 12 months. «Given we still think mortgage rates will average 5 per cent in 2023, we expect a 12 per cent peak-to-trough fall in house prices,» he said. Tom Bill, head of UK residential research at estate agent Knight Frank, said he expected house prices to drop about 10 per cent over the next two years «as a new lending landscape emerges after 13 years of ultra-low rates».

The property market is already showing many weaknesses, with the average UK house price flatlining in September for the first time in almost a year. In addition, newer data from mortgage provider Halifax showed house prices falling between September and October, the first drop since July 2021. BoE data also showed net borrowing of the mortgage debt by individuals declined month on month from £5.9bn to £4bn, the lowest since November 2021 and well below analysts’ forecasts.

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