 in a bid to bring down rampant inflation. Lifting interest rates is meant to encourage people to save, rather than spend, which in theory should help bring rampant inflation under control. The BoE predicts that inflation will peak at 11% in October and then remain above 10% for a few months after. But raising the base rate of interest makes the cost of borrowing, including loans, credit cards and mortgage repayments more expensive. And Stamp duty cuts, housing shortages, rising interest rates and higher mortgage borrowing costs are likely to lead to "downward pressures" on house prices in the months ahead. Lucian Cook, Savills head of residential research, said: "A new Prime Minister and fiscal policy u-turns appear to have reduced some of the pressure on interest rates, but affordability will still come under real pressure as the effect of higher interest rates feeds into buyers' budgets. "That, coupled with the significant cost-of-living pressures, means we expect to see prices fall by as much as 10% next year during a period of much-reduced housing market activity." The news comes after house prices fell by 0.9% in Octob){kind=link}
HOUSE prices could fall by 10% next year according to property experts at Savills.
And the amount that house prices could fall will vary by region – with some seeing prices cut by 12.5%.
But Savills predicts that house prices will rise by 6% in nominal terms over the next five years.
Next year, house prices in London are expected to take the greater hit, falling by 12.5%.
Property prices in the North West, Yorks and Humber, North East and Wales will see the lowest rate of decline – with an 8.5% drop.