The housing boom has clearly ended – but what happens now?

Sales have collapsed and buyers and sellers alike are waiting to see what happens next, writes Hamish McRae

The turmoil of the past few weeks has meant not only that mortgage rates have shot up, but many offers have been withdrawn (EPA)

House prices in Britain in October fell for the first time since July last year, and are now up only 7.2 per cent year-on-year on Nationwide’s index. The news sent a chill through the market, for house prices are a lagging indicator of what is actually happening.

The turmoil of the past few weeks has meant not only that mortgage rates have shot up, but many offers have been withdrawn. Sales have collapsed and buyers and sellers alike are waiting to see what happens next. The boom has clearly ended but will now be a crash, a plateau, or what?

There was another piece of news this week that gives us some clues. It was the clutch of stories about the toughness of the budget to come on 17 November. This newspaper’s take was that the NHS would be prioritised but there would be tax rises for millions of households and a cut in spending on other areas.