The housing market has been on an upward surging trend since the beginning of pandemic lockdowns. What was expected to slow down buyers actually spurred rapid growth in demand for property. The lockdowns created what was called a Race for Space as buyers sought out more space both inside and outside in desired property purchases.

The pandemic created a strong desire for more residential space in which to privately work from home, study from home, to do fitness at home, and for entertainment areas for the family. Hobby rooms also became popular as people spent more time at home than anywhere else.

Not only was there a strong demand for property, but strong demand in general for what had been overlooked opportunities to buy outside the larger populated areas and in country settings.

First time buyers entered the market confidently due to lower interest rates and homeowners became home movers with the opportunity to buy a more desirable pandemic lifestyle property and quickly sell their current home in the strong housing market.

Once inflation began to impact the economy, the Bank of England started to hike the standard base rate and lenders followed with their own increases. It was expected that the rate increases would spur a quick rush to buy as well as rush to remortgage, but there would also be a quick slowdown in demand that followed.

However, the slowdown has yet to occur though it is still anticipated. With each of the last four consecutive Bank of England Monetary Policy Committee (MPC) meetings, the rate has been adjusted upward. In December, the rate was at an all-time historic low of 0.1% and today stands ten times that level at 1.0%. 

It should be noted that some members of the MPC desired a more aggressive increase and at the last meeting would have liked the rate increase of 0.25% to be a 0.50% increase. This could signal that more increases are ahead and perhaps in greater increments than in the past four meetings.

Nationwide has issued their forecast as to demand in the housing market and suggest demand will soon be declining. Many experts suggest the slowdown is on the way as those that rushed to buy are likely to have done so while some will have been priced out of the market.

Robert Gardner, Chief Economist for Nationwide, advised, “The housing market has been remarkably resilient so far this year — it has continued to run above pre-pandemic levels for the first three months. But with the pressure expected in coming quarters, it seems logical it will slow.”