House sales set to be the lowest in 12 years by the end of 2023
House sales set to be the lowest in 12 years by the end of 2023, as house prices experienced the sharpest fall in 14 years in July according to Nationwide.
New data from Zoopla’s monthly house price index has revealed that sales are down by a fifth compared to 2022 as the number of houses sold in the UK is on track to be the lowest since 2012 by the end of this year.
This comes as inflated mortgage rates have pushed homeownership to unattainable levels, and as a result, house prices experienced the sharpest fall in 14 years in July according to data from Nationwide.
In light of this news, Shahram Shaida, CEO of home buying and property investment platform Allbricks, discusses the fall in house prices and why the Allbricks model may hold the answer to increasing market activity.
With interest rates remaining concerningly high, 1.6 million households with fixed mortgage deals which are set to expire this year are due to face a sharp increase in repayments. While homeowners who hold a fixed-rate mortgage will not witness an immediate change in their monthly payments, those looking to remortgage face a sharp rise in repayments once they move on to a new deal.
According to economists from the Bank of England (BoE), nearly a million homeowners are facing a £500-a-month increase in their mortgage repayments at the end of 2023. As a result, data from Halifax showed that property values declined for a fourth month in a row by 0.3% in July, with the affordability of mortgages being attributed as the main factor for this drop.
Despite the obstacles which the UK property market is currently facing, Shaida comments that Allbricks could hold the answer to Britain’s housing market woes, and in fact stimulate activity back into the market. The platform offers a fresh approach by allowing a diverse range of investors to co-invest in properties starting from £10,000 or 1% of the property’s value.
Qualified investors become part-owners and pay rent on the remaining portion, which serves as a dividend for investors. With Allbricks’ model standing at 32% more profitable than buy-to-lets, this could lead to a new wave of investment and regeneration in communities in need across the UK.
Shahram Shaida, CEO and founder of Allbricks, comments on the issues that the company aims to address:
“Most of us have two options: rent or get a mortgage.
“The problem is that for a vast majority of the population, mortgages require unaffordable deposits and interest rates.
“The traditional mortgage represents an antiquated, outdated model that isn’t really fit for purpose for many UK home buyers anymore.
“With rising interest rates, the cost of living, and even the increasing number of people who are choosing to be self-employed, we need and deserve a better solution.
“Allbricks, has uniquely unitised residential property to democratise wealth creation through home ownership.
“By removing the mortgage model and creating a crowdfunding type of approach, we’ve made something better than a mortgage for home buyers, better than a buy-to-let for investors and creating new unique investment opportunities for institutional investors.”
Kindly shared by Allbricks
