We’ve seen a sharp rise in inflation and the Bank of England is expected to hike interest rates in early February. What does this mean for UK house prices? We hear from Knight Frank head of UK residential research Tom Bill and Toscafund chief economist Savvas Savouri. The pair last came on the podcast six months ago, ahead of the sharp increases in gas prices which have contributed to record inflation rates.  

But Savvas suggests that while inflation is likely to breach 6%, these rates won’t persist and predicts that inflation will ease off to around 2.5% by the summer of 2023.  

Against this backdrop, Tom anticipates UK house price growth to slow somewhat, ending the year in single digit growth territory after 2021’s unusually strong performance. However, he adds that Prime Central London could outperform the overall UK rate of growth as overseas buyers return to the market.  

Finally, they discuss the tech disruptors entering the mortgage market, with Savvas suggesting the likes of online bank Monzo, digital mortgage broker Habito and London-based fintech Perenna, could have a major impact. To the extent that mortgage rates could even fall as disruptors buy up market share, leading to more competitive rates.  

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