Parson Estate Agents, in Diss, says house price rises will slow down due to cost of living crisis
A Diss-based estate agent has told homeowners that “the boom is over”, as the rise in house prices looks set to ease.
Prices in Diss – which have risen by 27.7 per cent in the past two years – will likely slow down as a result of the cost of living crisis, said Kevin Parson, who runs Parson estate agents, in Victoria Road.
Mr Parson explained the cost-of-living crisis, coupled with rising interest rates, will result in a significant drop in the number of first-time buyers in the town.
Not only will house price growth ease, but it could also even see negative growth in the months ahead, he added.
Mr Parson said: “With the amalgamation of the Diss house price rises in the last two years, the increasing interest rate rises, and the continuing cost-of-living crisis, there is no doubt the momentum in the Diss housing market will be slower in the next 12 months compared to the last 24 months.”
He added: “I anticipate Diss house price growth will ease – and, in some months, be slightly negative.
“I expect transaction levels to be lower in the latter part of this year and the first half of 2023, yet they are most likely to stay close to the long-term average.
“The boom is over,” he added. “Yet it shouldn’t be a bust situation.”
Earlier this month, The Bank of England raised the base rate by 0.5 percentage points to 1.75 per cent – to meet inflation rates which look set to hit 13 per cent by October.
Whilst people on fixed-rate mortgages are protected from the hike, those on variable rates can expect to feel the pinch in the coming months.
Mr Parson added: “A rise in the base rate will, in theory, slow inflation by reducing consumer demand.
“In the short-term, this increase in the base rate will increase mortgage rates, thus adding fuel to the fire of the cost-of-living crisis by growing mortgage costs.
“Those Diss homeowners on tracker or variable rate mortgages will instantly increase their mortgage payments.”
