Essex homeowners and property buyers face turbulent times

The Office for Budget Responsibility said house prices are forecast to drop by nine per cent between the fourth quarter of 2022 and the third quarter of 2024.

In recent years, however, Colchester homeowners have seen huge rises in the value of their homes.

Over the last 12 months, for example, the average price of a property in Colchester has been £284,079 and sales have totalled a staggering £1,759,987,845.

Ten years ago, however, a property in the area would set buyers back by £172,383, meaning people are seeing a 65 per cent increase in value over a decade on average.

But it seems the boom time could be over, which will come as welcome news to first time buyers but could leave some homeowners in negative equity.

Mark Lawrinson is the operations director and residential sales at property group Beresfords, which has branches all over Essex.

He said: “There is no denying the current economic climate has influenced the housing and mortgage market.

“However, mortgage rates have already started to come back down, and many lenders over recent weeks have reduced their products multiple times with some rates back available at sub for per cent depending on a buyer’s position and deposit.

“While we have enjoyed adversely low rates for over a decade, the rates we now have are still well below the long-term average of over six per cent and we don’t envisage them getting this high over the coming years.

“While many will comment on a specific percentage drop that is expected, we have to bear in mind that any assets value is based on basic economics of supply and demand.

“We are still seeing sellers putting their house on the market as they are forward planning a move in 2023, which has actually caused an increase in supply but drop in demand as buyers shift their focus to the festive period.”

Average interest rates on the stock of outstanding mortgages are expected to peak at five per cent in the second half of 2024, the highest level since 2008, it added.

Toni Chamberlain, from Clacton, is a director and mortgage and protection advisor at Pearson Mortgages, and an appointed representative of HL Partnership Limited.

She said: “There is a general understanding the base rate could increase to four per cent or higher next year.

“It is in my opinion this could potentially leave space for swap rates to fall and mortgage lenders to reduce pricing. “A potential scenario could be towards the end of next year inflation could start to fall which could then mean interest rate reductions. But this is not guaranteed to happen.

“My professional opinion would be there may be a potential rise, however, it would be difficult to say as to whether it will stay at this rate or increase further.

“We can only hope for reductions but it is difficult to predict by how much.

"If anyone would like to speak to me about their options my email is toni@pearsonmortgages.co.uk."

Mortgage advisor Toni Chamberlain (Image: Newsquest)

Reacting to the news of properties decreasing in value, Paul Nutter, from Mistley said: “It is good for youngsters, this bubble has been due to burst for some years.”

Matthew Keys, however, said: “Unfortunately, house prices reducing or crashing is never a good thing as people can become stuck or lose their home, the only winners are the cash rich.”

“What needs to happen is for prices to stagnate and wages to rise until we get back to three times one wage and the mass building of council homes.”