Homeowners are going to be facing difficult times ahead. Experts are warning that they should prepare. There won’t really be anything to stop the woes that are coming, but they could be dampened. Preparing sooner rather than later could make all the difference. So, what is so special about homeowners that they are being singled out in news reports and financial articles? They are going to face financial strains not seen in decades. 

There is a lot of frustration in the news these days. Nobody likes it when things are tough, and financially things are tough right now. It only takes a little bit of looking around to see that perhaps that frustration is not so bad when things could be worse, and for others outside of the UK it certainly is in some areas. However, thinking things could be worse doesn’t calm the fear and worry when you wonder if you are going to be able to afford your home or not, and that is a real situation for many.

The housing market is losing steam. Once so full of energy that it seemed unstoppable, it has reached a hill that it might not be able to conquer without help along the way. There have been many times in just the past years that experts forecasted gloom and doom for the market only for it to exit the fog and come out victorious. During the Brexit battles, home buyers remained resilient in their pursuit of ownership. No one could have foreseen the explosive desire to buy when a global pandemic set in and lockdowns almost completely altered how hopeful home buyers shopped. The market flourished despite the pandemic, and as things returned closer to normal, the UK housing market surged ahead.

Nobody would want to make an investment and then watch it decline. This is certainly true for homeowners. Many would say they would like to see their home increase in value so that some day they could sell it and have profit in hand to purchase a bigger home, or perhaps downgrade and use the funds to retire. The most expensive purchase most people will ever make is with their home. It is supposed to be an investment. There is always supposed to be demand to keep the value climbing and the investment solid. However, a global pandemic thrown into the mix can have unforeseen consequences for those that invested in property with the hope of watching their investment work for them.

According to the latest forecasts from economists, inflation might have reached its peak. It has a long way to go until it is close to the Bank of England’s target level of 2.0%, but it is good news if they are right. Inflation and higher borrowing costs have been straining household budgets. One could question if inflation was being controlled by higher interest rates, then once it has indeed peaked should interest rates decline as fast as they grew, and the answer is not likely.

Another report concerning the UK housing market has revealed a decline in demand from home buyers. According to the Royal Institution of Chartered Surveyors (RiCS), recent sales and house prices declined in January. Not only is demand down, but supply remains low. The report revealed a net balance of -47% for new buyer inquiries. This level was the lowest since 2009 and the ninth consecutive month with a negative reading. Much of the blame for the lack of attention from hopeful buyers is laid on the higher interest rates facing borrowers and thus making buying a home much more expensive than just one year ago.