Is the runway property market due a reckoning from rising rates and inflation?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 4 March 2022

⏱️ 55 minutes

🔗️ Recording | iTunes | RSS

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Summary

House prices have soared in the pandemic boom – with the average home an astonishing £44,000 more expensive at £260,000, according to Nationwide.

But mortgage rates are rising, the cost of living crunch is hitting hard, and the idea of a post pandemic Roaring Twenties seems very distant right now, so is a reckoning for Britain’s property market on the way.

On this week’s podcast, Georgie Frost, Lee Boyce and Simon Lambert dive into the housing market to look at why homes are now the most expensive they have ever been when compared to wages – and what could send them even higher or tip them into decline.

The team also look at the mortgage market, where the best bargain basement fixed rate deals have long vanished and rates have been rising rapidly.

But while they might be going up, mortgage rates are still very cheap and the Bank of England is weighing up loosening some lending rules, so where does that take us next.

Simon also has some advice for anyone whose mortgage fix is up for renewal this year. Spoiler alert: it’s to start looking into a new fixed mortgage now.

And a reader question – and yes, this was a genuine one – of whether taking $1million-plus in payment for a property in the Caribbean in crypto is a good idea?

And finally, credit cards are dead, it’s all about buy now, pay later… or is it? There’s a new Avios-earning Barclaycard out and Lee’s excited. Find out why by listening to the end.

Transcript

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0:00.0	Welcome to This Is Money podcast. I'm Georgie Frost and joining me and editor Simon Lambert today is Deputy Editor Lee Boyce. And coming up, house prices are at a record high compared to wages. How much longer can this go on for? One thing that has come to a rather abrupt end is super low fixed mortgage deals. As rates climb, what can you do if you need to fix this year? And would you
0:22.0	accept crypto for your Caribbean hideaway? Plus, today, as there's talk, energy bills could hit
0:27.4	three grand a year to fix or not to fix. That is the question. And avios points bonanza,
0:34.7	is it time to get a credit card? Don't forget you stay up to date with all the latest
0:37.8	breaking money news just to go to this ismoney.co.uk or download the app. But first,
0:44.7	house prices. My favourite subject. The reason if you are new to the podcast, why historically,
0:53.1	famously, I don't like house prices is because
0:56.2	back in the good old days before pandemics and the like, you'd get about 15 different ones a month,
1:03.6	all totally varied. Now, they may all be slightly different, that is true, but they all say
1:10.7	essentially the same thing,
1:12.1	that house prices at the moment are completely nuts. It laughs in the face of financial crises,
1:18.8	Brexit, pandemics. So can anything halt this juggernaut that is the UK housing market?
1:25.4	Simon, you've been writing about this. Exactly how high are prices at the moment?
1:34.0	Give us some figures. In monetary terms, the nationwide house price index, which is the most
1:40.2	recent of the house price indices to emerge and updates us on what happened up to
1:45.5	February so i.e. last month the average home now costs 260,320 pounds. There will be some of our
1:54.7	listeners who are sitting there thinking that's pretty much bang on what it cost me to buy the
2:00.2	bog standard average home,
2:01.6	not bog standard, the lovely average home in my local area. There will be other listeners
2:07.4	sitting there thinking, how much? How much are these people paying for these houses? What on earth
2:13.9	is going on? You could get a mansion around here for that. Probably not a mansion.
2:18.2	There will also be many of our listeners going,
	...

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